Russia’s CBR governor endorses digital currencies for use in international settlements

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The head of the Central Bank of Russia (CBR), Elvira Nabiullina, has stated that the central bank is only in support of the use of digital assets for facilitating international trade. According to Nabiullina, digital assets are too volatile and risky to be allowed in the domestic market.

The CBR governor commented while speaking with RBC, telling the news outlet that digital currencies could be safely used in international settlements if they do not “penetrate” the domestic market.

“Cryptocurrency should not be traded on organized marketplaces because this asset is too volatile, too risky for potential investors,” she said.

Digital assets that can be listed on Russian platforms must comply with investor protection requirements, including having an emission prospectus, responsible managers, and compliance with information disclosure requirements, she added.

Her remarks strongly indicate that Russia may soon roll out its support for digital currencies in international settlements. As RBC notes, the government has been dropping hints about the plans. In May, the CBR deputy governor Ksenia Yudaeva said that Russia is considering the possibility.

However, there are no marked changes in Nabiullina’s consideration of digital assets for the local economy. The CBR previously proposed to ban digital assets and block reward mining in the country, citing their volatility as a threat to Russia’s economic stability.

The stance only shifted to be more favorable following the onset of the country’s invasion of Ukraine and its resulting macroeconomic changes, as well as opposition from other government sectors that were more in support of providing regulations for the industry.

Russia is pushing several digital currency regulation bills

The CBR is now in support of treating digital assets like property. It has thrown its weight behind the bill proposed by the ministry of finance which is currently making its way through the Russian parliament.

The bill, titled “On Digital Assets,” will dictate the framework for regulating the industry and market, while a second bill, “On Mining in the Russian Federation,” will regulate block reward mining.

In between the two proposed bills, the parliament has proposed a ban on using digital assets as a payment method for goods and services. The bill’s proponents, Anatoly Aksakov, head of the House Financial Markets Committee, stated that the law is necessary to ensure the ruble’s sovereignty as legal tender. The law has passed its first reading.

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