- The Bank of Russia is set to re-examine its longstanding opposition to stablecoins, conducting a feasibility test later this year.
- It follows stablecoin pushes by the US following the GENIUS Act and the EU’s ongoing pursuit of a digital euro.
After years of opposing stablecoins, Russia is reconsidering its stand and will conduct a feasibility test later this year on how these fiat-pegged tokens would fit into its financial architecture.
The Bank of Russia has softened its stance on stablecoins as most of its global rivals embrace the tokens, revealed First Deputy Chairman Vladimir Chistyukhin, as reported by Mail.ru. Speaking at the Alfa Talk conference, Vladimir said that there’s increasing pressure on the top bank to reassess its stance as demand for stablecoins in the country spikes.
He stated:
“We plan to conduct a study this year to reassess this situation. Indeed, our traditional position is that this is unacceptable, but taking into account the practices of a number of foreign countries, we will reassess the risks and prospects here and will also bring this up for public discussion.”
Russia has had a chequered past with crypto. The country is reportedly using crypto to circumvent US sanctions, including as payment for oil with China and India, as we have previously reported. The government has also looked into Bitcoin mining, while some of the country’s largest banks are now offering crypto services.
However, it has opposed most efforts to use stablecoins locally. Most stablecoins are issued by American companies, with the US dollar having a 99% share of the $314 billion market. The Russian government has expressed concerns over allowing the use of stablecoins issued and controlled by offshore companies.
A Russian Stablecoin
According to the central bank official, Russia could have its own stablecoin, pegged to the ruble. It would join dozens of other major economies that saw new local stablecoins launched in the past year. They include South Korea, where the first won-pegged stablecoin launched last September. A month later, the first stablecoin pegged to the Japanese yen launched.
The stablecoin would complement the digital ruble, a CBDC being developed by the central bank, despite opposition from commercial banks, which insist that the existing rails are sufficient for both retail and enterprise users.
But while Russia pursues a stablecoin, its adversaries have been bracing to crack down even further on any crypto transactions originating from the country. As the Financial Times reports, the European Union is preparing to ban all crypto transactions from Russia as part of its wide-ranging sanctions.
An internal document seen by the FT states:
“In order to ensure that sanctions achieve their intended effect [the EU]prohibits to engage with any crypto asset service provider, or to make use of any platform allowing the transfer and exchange of crypto assets that is established in Russia.”
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