- Russia is exploring blockchain and crypto-based innovations to shore up its economy following sanctions.
- Alexander Shokhin has previously supported draft legislation to restrict crypto and its uses.
- Russia’s CBDC project has been postponed indefinitely.
According to Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP), Russia needs to develop regulations, infrastructure, crypto exchanges, and stablecoins to maintain any degree of competitiveness with the U.S.
Shokhin, who in a matter of two years has shifted from a crypto suppression stance to pro-crypto proliferation, has warned that such innovations should not come at the cost of sovereign rights nor be outside the remit of its central bank.
Bitcoin and Stablecoins
In a recent interview with local media outlet TASS, Shokhin expressed the need for Russia to properly establish a foothold in the digital assets space, citing recent developments in the U.S. as reasons to begin moving forward. He stated (translated):
“Well, after Trump said that now the U.S. will become the crypto capital of the world and is already accumulating crypto reserves, at least in Ethereum and Bitcoin, we also need to look at it in some way.”
He explains that this needs to be done pragmatically without challenging the central bank and government’s position as the nation’s money issuer.
However, he recognizes Russia’s growing economic challenges and the need for a new approach.
“Here we could think about creating a payment and settlement system similar to the IMF’s special drawing rights, but with the introduction of additional assets, reserves in the form of gold,” Shokhin noted.
Since it invaded Ukraine, sanctions against Russia have strained the nation’s finances, forcing it to consider adopting blockchain and digital assets to skirt sanctions and shore up its economy.
However, these efforts remain slow and staggered despite talks of it establishing its own crypto reserve.
Shokhin Shifts
Shokhin’s somewhat pro-crypto stance is in line with Russia’s recent crypto push, which has seen it legitimize the Bitcoin mining industry and encourage its domestic businesses to use crypto in cross-border payments amid growing pressure from economic sanctions.
Shokhin hasn’t always supported crypto. In 2022, he supported efforts to impose strict regulations and “reduce Russians’ interest in cryptocurrency.”
He also supported banning its use as a means of payment.
Now, he views it “not as an alternative currency” but instead as a new payment and settlement system “on which national currencies can be based.”
For now, experiments and discussions remain ongoing, though interestingly, the nation’s central bank digital currency (CBDC) project to create a digital ruble is indefinitely on ice following feedback from banks.
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