As countries across the globe reevaluate their chosen currencies for international transactions, two distinct trends have emerged. While some nations are working to diminish the influence of the U.S. dollar in trade, others are embracing the potential of cryptocurrencies for settling global payments.
In a notable development, Russia is taking significant steps toward the latter approach. A recent report revealed that the Central Bank of Russia is actively considering the use of digital currencies, such as cryptocurrencies, in international settlements. A draft law is currently being developed to facilitate this process.
Russia’s bold embrace of cryptocurrencies for international trade
Elvira Nabiullina, the Chairman of the Central Bank of Russia, recently shared at a New People party gathering that the regulator is exploring the possibility of using digital assets to settle transactions with foreign entities.
While the central bank remains opposed to the domestic use of cryptocurrencies, Nabiullina noted that these assets could be employed for international payments. This may involve the establishment of specialized institutions in Russia to handle mining and the transfer of cryptocurrencies to overseas organizations, along with other digital finance operations.
The Central Bank is simultaneously collaborating with the government to determine which institutions will be authorized to engage in these activities.
Promoting the Chinese Yuan and advancements in digital ruble CBDC testing
Initially, it is anticipated that a state-owned company will be granted the responsibility before extending the privilege to private enterprises. In addition to its interest in cryptocurrencies, Russia has been actively promoting the international use of the Chinese yuan. President Putin recently revealed that approximately two-thirds of Russia-China trade is conducted in Yuan and Ruble.
He expressed support for using the Yuan for transactions between Russia and countries in Asia, Africa, and Latin America. Furthermore, Russia is making significant progress when it comes to Central Bank Digital Currencies (CBDCs). Russian banks are slated to begin testing the digital ruble CBDC with customers in the near future, following the adoption of a regulatory framework by the end of April or May.
