Report Suggests Nations Central Bank Considers Legalization of Stablecoins for Commerce with China
The Bank of Russia is contemplating the approval of stablecoins for conducting cross-border trades, as local businesses in the sanction-ridden country seek alternative methods to trade with China. The central bank is considering the legalization of stablecoins for cross-border transactions, as Russia’s economy looks for alternative ways to maintain trading activity with China. In an interview with Russia’s state newspaper Izvestia, Alexei Guznov, the deputy governor of the central bank, stated that the proposal is being discussed and formulated, with the ultimate aim of regulating the entire process chain. This would allow individuals to transfer these assets into Russia, accumulate them, and use them for international payments. Guznov suggested that the initiative could potentially transition from a temporary experiment to a permanent regulatory framework, although no specific timeline for approval was disclosed.
Stablecoins, unlike traditional cryptocurrencies such as Bitcoin (BTC), are typically backed by assets and have a central issuer, which addresses concerns that previously led the Bank of Russia to oppose the legalization of digital assets. However, recent shifts indicate that the central bank is adjusting its stance, as even major Russian metal producers have reportedly started using stablecoins for transactions with China, as traditional payment methods face severe limitations due to sanctions.
Despite these developments, questions remain about how the legalization of stablecoins would comply with international sanctions, particularly since Tether has expressed its willingness to adhere to sanctions policies. Tether recently collaborated with Chainalysis to identify wallets that may pose risks or be associated with illicit and/or sanctioned addresses, in order to emphasize its commitment to complying with international sanctions.
