Foreign stablecoins, including USDT and USDC, will be available for purchase by qualified investors in Russia starting September 1: a separate regime for such non-deliverable digital instruments is being created in the new Russian cryptocurrency infrastructure, Interfax reported.
What the Amendments Change
The amendments for the second reading of the government bill “On Digital Currencies and Digital Rights” were prepared by the State Duma Committee on the Financial Market. If adopted, cryptocurrency and related instruments will receive clearer rules for circulation through Russian market participants.
The first version of the bill already paved the way for operations with digital currencies through licensed operators, brokers, and trust managers. In addition, the document allowed exchange trading of assets with a capitalization above 5 trillion rubles and a trading history of more than five years. In practice, only Bitcoin and Ethereum meet these criteria.
The problem arose with stablecoins. Popular digital coins did not fall under the classic definition of digital currency because their issuers, including Tether Limited and Circle, undertake obligations to maintain value and redeem tokens. This contradicts the key feature of digital currency—the absence of an obligated party.
A New Category Is Introduced for Stablecoins
To close this gap, the bill added the concepts of “Foreign Digital Instrument” and “Non-Deliverable Foreign Digital Instrument.” The second format certifies only monetary claims and allows settlements without transferring the underlying asset.
This description fits fiat-backed stablecoins. Essentially, a stablecoin can be pegged to a regular currency: fiduciary money, such as the US dollar, serves as the basis for maintaining its value. At the same time, such instruments are not considered securities and do not function as bonds.
What to Know About Stablecoins
Stablecoins are crypto assets whose rate is kept close to an underlying asset, most often a fiat currency. Unlike Bitcoin and Ethereum, they are not designed for significant price fluctuations: their value lies in a more stable rate and a clear peg.
They work through collateral or a price maintenance mechanism. The main types are:
- Fiat-backed: pegged to regular currencies, such as the US dollar.
- Crypto-backed: supported by other crypto assets.
- Algorithmic: maintain their rate through automatic rules for issuance and supply reduction.
The main stablecoins include USDT, USDC, DAI, BUSD, and TUSD. The most well-known remains USDT in terms of usage, and USDC is considered one of the main large dollar options. Together, USDT and USDC account for 89% of the global stablecoin market.
There are also stablecoins pegged to the euro, such as EURT, EUROC, and Stasis EURS. They are used where it is more convenient to hold value and make settlements in European currency.
Purchase, Yield, and Risks
Stablecoins are usually purchased through crypto exchanges, P2P deals, or exchangers. Verification is often required on such platforms. In the Russian infrastructure for foreign non-deliverable digital instruments, purchases will be available to qualified investors; for non-qualified market participants, access depends on the Bank of Russia’s list.
Earnings from stablecoins are usually not related to price growth but to use in crypto services: staking, farming, providing liquidity, or arbitrage.
Main risks:
- Issuer risk: the company may fail to fulfill its obligations to maintain or redeem tokens.
- Collateral risk: reserves may be insufficient or their quality may be questionable.
- Regulatory risks: rules of circulation may change.
- Technological risks: failures, vulnerabilities, and infrastructure errors may affect access to assets.
Stablecoin Regulation and the Difference From CBDC
Globally, stablecoin regulation usually revolves around issuers, reserves, and token redemption rules. The Russian approach proposes to single out foreign stablecoins as a separate category of digital instruments and restrict access to them for retail investors.
CBDC are central bank digital currencies. The main difference is who issues and is responsible for the asset: stablecoins are created by private issuers or crypto projects, while CBDCs are issued by a state regulator.
The Central Bank’s Position and Investor Restrictions
This approach is close to the position of the Bank of Russia. In a June report, the Central Bank classified USDT and USDC as foreign digital rights. These two instruments account for 89% of the global stablecoin market.
Key parameters of these two instruments:
- USDT and USDC: together account for 89% of the global stablecoin market; issuers are Tether Limited and Circle; type of collateral is fiat.
The regulator also noted their practical benefits for cross-border payments. Among the advantages:
- Instant transfers.
- Lower cost compared to bank operations via SWIFT.
- Relatively moderate volatility.
Only qualified investors will be able to purchase such instruments. For non-qualified market participants, access will appear only when the Bank of Russia includes a specific instrument in a special list of permits. These restrictions will not apply when such instruments are used for settlements under foreign trade contracts.
This concerns bill No. 1194918-8 “On Digital Currency and Digital Rights,” which is being prepared for the second reading.
