- Russia plans to create two crypto exchanges and stablecoins for its foreign trades
- However, the plan could face potential challenges, according to experts
Russia plans to establish two crypto exchanges and stablecoins to advance its foreign trade. According to a report by the Russian publisher Kommersant, the state plans to create stablecoins linked to the Chinese Yuan and currencies of BRICS member countries.
“Primary ideas currently revolve around the creation of stablecoins. It is planned to create stablecoins tied to the yuan and a basket of BRICS currencies.”
Russian plan – Foreign trade using crypto
This isn’t the first time Russia’s crypto moves, especially regarding foreign trade, have hit the headlines. Last month, Russia passed a key crypto bill (Experimental Legal Regime—ELR), including crypto mining regulations, a step towards adopting crypto as part of its international trade.
The plan is aimed at cushioning the country from negative economic impact and delays linked to Western sanctions. In July, the Governor of Russia’s Central Bank Elvira Nabiullina revealed the distress the sanctions were exerting. He claimed,
“The risks of secondary sanctions have grown. They make payments for imports difficult, and that concerns a wide range of goods.”
Russia’s bold crypto experiment
The latest update seeks to accelerate the use of crypto to alleviate these problems. To achieve this, Russia will establish two crypto exchanges, one with the St. Petersburg Currency Exchange and another in Moscow.
According to a regulatory expert familiar with the plans, Mikhail Uspenksy, the exchange’s initial phase will include a small group of businesses and individuals.
“Initially, the exchange will be used in a test mode by a limited group of users, followed by major exporters and importers: subsidiaries, affiliates of “blue-chip” companies, and businesses within their perimeter.”
However, the report also noted potential challenges to adopting the planned exchanges and stablecoins. According to Nikita Vassev, Founder of TerraCrypto, only people without choice will use the platforms.
“Only those without any other choice will use them. The only scenario in which a market participant would turn to a domestic platform is one of hopelessness.”
Uspensky also noted that crypto-assets linked to a Russian exchange could be flagged overseas. This might expose recipients or senders to potential risks.
“If information leaks into the public domain that cryptocurrency was bought on a Russian exchange, it can be easily tracked with special technical tools, marking all transactions as suspicious, severely affecting not only the participants in the deals but also future holders of the digital currency, even those entirely unrelated to Russia.”
The focus will now shift to the state and its mitigation strategy to address some of the potential challenges to its crypto plan.
