Russia to use Digital Ruble for Remittances with China?

Towards the end of last week, Russian regulators approved cryptos like Bitcoin for cross-border settlements. Russian Deputy Finance Minister Alexei Moiseev reportedly stated that the government agency and the central bank had “on the whole” agreed on the said rule that permitted citizens to send cross-border payments using cryptos. 

Now, per a recent Reuters report, Russia’s to-be-launched digital ruble is likely to be added to the list post its launch. With sanctions against Russia still in place over its actions in Ukraine, the country is on the hunt for alternative means of carrying out transactions.

Anatoly Aksakov—Head of the Financial Committee in Russia’s lower house of parliament—told Reuters,

“The topic of digital financial assets, the digital rouble and cryptocurrencies is currently intensifying in society, as Western countries are imposing sanctions and creating problems for bank transfers, including in international settlements.”

He further added, that the “digital direction” was the key because financial flows can bypass systems controlled by unfriendly countries.

E-Ruble payments with China up on the cards next?

Russia’s inclination towards the digital ruble is known. A couple of months back, a CBR representative noted that the bank preferred the digital form of currency over other alternatives, like stablecoins. More so, because it fused all the advantages of a digital means of payment and had the reliability of a full-fledged currency.

Read More: Bank of Russia prefers digital Ruble over private Stablecoins

Aksakov said that the next step for the digital ruble would be its launch for mutual settlements with China, which has already tested its digital yuan. He added,

“If we launch this, then other countries will begin to actively use it going forward, and America’s control over the global financial system will effectively end.”

The Ruble, on its part, is likely to be rolled out in 2024, per a monetary policy update released by the Bank of Russia last month. As reported earlier, the bank stated that all financial transaction trials involving the digital ruble—right from customer-to-customer transaction trials, customer-to-business, and business-to-customer settlements—will be covered.