Bank of Russia proposes banning the use of stablecoins as a means of payment

The Bank of Russia is considering restricting the use of stablecoins in settlements on Russian territory, in a move similar to its stance on cryptocurrencies, said Ivan Zimin, director of the Bank’s Department of Financial Technologies, according to Interfax.

“We have already taken the first step with regard to unsecured cryptocurrencies, prohibiting them, and we will probably take a second step, restricting the use of, including stablecoins, for settlements,” he said.

According to Zimin, the official means of payment will be considered only the ruble and its digital counterpart:

“All else — stablecoins, unsecured private cryptocurrencies, some other monetary surrogates — cannot be used as a means of payment.”

The head of the State Duma committee on the financial market, Anatoly Aksakov, considered the question discursive:

“I was, to be honest, puzzled by Ivan Zimin’s remark about wanting to directly prohibit recognizing sbercoins as a means of payment. In my view, this will require a discussion among technologists, economists, and bankers, by the way.”

He also noted that he sees prospects for digital assets development by Russian commercial banks. According to Aksakov, the ruble issued by banks “could also be a digital currency used as a means of payment and a means of circulation”.

“We should have found technological solutions to connect the Central Bank’s issuance in the form of a digital currency with issuance carried out by commercial banks. This question is not yet resolved,” the official added.

Aksakov said that, under Russian law, stablecoins are more likely to fall under the definition of digital financial assets rather than digital currencies, since the latter are defined as lacking a guarantor and collateral.

“A stablecoin, however, is backed, i.e., a stablecoin is, rather, not a digital currency but a digital financial asset,” he said.

Ministry of Finance shares the Central Bank’s view that the sole legal means of payment in the Russian Federation is the ruble, and that the use of digital currencies in this capacity is prohibited.

“Issues related to the issuance and circulation of digital currency are not regulated by RF legislation. Work in this direction is ongoing,” the ministry noted.

Recall, the law “On Digital Financial Assets” (“On DFA”), which defines digital financial assets and digital currencies, was enacted at the end of July last year. It recognises cryptocurrencies as property and prohibits their use for payments for goods and services on the territory of the Russian Federation. The document came into force on January 1, 2021.

After its adoption, Aksakov stated that questions about organizing the issuance and turnover of cryptocurrencies will be spelled out in a separate bill or regulated by amendments to the enacted law “On DFA”.

He also noted that it is necessary to clarify the concept of digital currencies, laid down in the law, in connection with the possible issuance of a digital ruble by the Bank of Russia.

The Bank of Russia allowed the creation of a digital ruble in October 2020, publishing a special report. A detailed analysis of the document can be found in ForkLog’s exclusive.

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