Russia is discussing a new model for regulating digital assets. Authorities may allow the use of stablecoins for settlements, but keep the ban on payments in cryptocurrencies like bitcoin. This approach is currently being considered by the Ministry of Finance.
The idea is to separate different types of digital assets and regulate them individually. Stablecoins in this system may receive a special status.
Stablecoins May Be Recognized as a Payment Instrument
The Ministry of Finance believes that tokens pegged to national currencies are closest to regular money. That is why they are being considered as a possible settlement tool.
According to Alexey Yakovlev, director of the financial policy department at the Ministry of Finance, stablecoins should be regulated separately from other cryptocurrencies. After the adoption of the basic law on digital assets, authorities will be able to move on to developing special rules for such instruments.
This could involve a full-fledged separate law that will regulate the issuance, circulation, and control of operations with stablecoins.
Cryptocurrencies Still Outside the Payment System
At the same time, the authorities’ position on classic cryptocurrencies remains unchanged. The use of such assets for payment of goods and services will likely remain prohibited.
Bitcoin and other decentralized cryptocurrencies are viewed by Russian regulators primarily as investment assets. They are not yet planned to have an official role in the payment system.
Thus, the authorities are trying to separate two categories of digital instruments. On one side are volatile cryptocurrencies, on the other—stable digital assets pegged to fiat currencies.
Russia Prepares Comprehensive Market Regulation
The discussion of stablecoins is taking place against the backdrop of preparations for a large-scale reform of digital asset regulation. The Ministry of Finance and the Bank of Russia have already developed a bill that should define the market architecture.
According to the proposed model, cryptocurrency operations will go through the existing financial infrastructure. Banks, brokers, and exchanges will be able to work with such assets based on current licenses.
Specialized crypto platforms will have to obtain separate permits and meet stricter requirements. Foreign services wishing to operate in the country will likely have to open local offices.
Digital Assets May Be Recognized as Monetary Instruments
In the new regulatory concept, cryptocurrencies and stablecoins may receive the status of ‘monetary assets.’ This concept is broader than the existing classification.
Currently, the Russian law ‘On Digital Financial Assets,’ which came into force in 2021, mainly regulates tokenized assets and digital securities.
At the same time, the term ‘digital currency’ is used in current legislation in a limited way and does not give cryptocurrencies full status as a means of payment.
Stablecoins Already Used in Settlements
The interest of Russian authorities in stablecoins is not only related to technology. Such instruments are already being used in international settlements.
After the introduction of financial restrictions, Russian companies began to use tokens pegged to the dollar or other currencies more actively for cross-border operations.
However, the use of popular stablecoins also faces blocking risks. For example, operations with USDT may be restricted by issuers or exchanges. Against this backdrop, alternative projects are emerging, including tokens pegged to the ruble.
Risks and Criticism
At the same time, international regulators warn of possible risks. According to the Financial Action Task Force (FATF), stablecoins are increasingly being used in illegal financial schemes.
According to blockchain company analysts, such tokens account for a significant share of transactions related to illegal activities. Nevertheless, many countries continue to explore their potential.
A New Stage of Digital Money Regulation
If the Ministry of Finance initiative is implemented, Russia may get a regulatory model in which different types of digital assets perform different functions.
Cryptocurrencies will remain investment instruments. Stablecoins may be used for settlements. And the state digital currency will develop separately. This approach is already being discussed in many countries. It reflects an attempt to adapt the financial system to the rapidly growing digital money market.
Read more: Study Shows: AI Chooses Bitcoin for Savings, Stablecoins for Payments
