Many countries have been rethinking the currency or method of payment for cross-border transactions. On the one hand, many of them want to lessen the role the dollar plays in international trade. On the other hand, several countries are starting to accept cryptocurrency as payment.
One such nation that is headed in the latter path is Russia. According to a recent report, the Central Bank is considering whether digital currencies like crypto might be used for foreign settlements. In fact, a draught law is being created right now.
Russia to use crypto for external payments
At an event with representatives of the New People’s Party, the president of the Central Bank, Elvira Nabiullina, recently said that regulators can use digital assets for settlements with foreign entities. These manipulations are possible within the framework of the experiments. As Nabiullina pointed out, the Central Bank is against the use of cryptocurrencies in the country. However, this money can be used for external payments. This could mean the creation of private companies in Russia that mine cryptocurrencies and transfer them to foreign institutions. These organizations will also be involved in other digital financial businesses. The central bank consults simultaneously with the government to determine which institutions can be delegated to do the same. Reports indicate that these establishments are likely to be transferred to a state-owned company first. Private companies will also join in the future. Russia also supports the internationalization of the renminbi. In a recent speech, Putin claimed that roughly two-thirds of trade between Russia and China is conducted in yuan and ruble. The president also stated that his country supports the use of the yuan in settlements between Russia and countries in Asia, Africa and Latin America. Meanwhile, Russia has also made progress with its central bank’s digital currencies. The Bank of Russia is expected to begin testing its CBDC digital ruble with customers soon. As reported, the process will begin after the approval of the legislative framework in late April to May.
