Russian business leaders optimistic about BRICS Digital Fiat

Russian business leaders optimistic about BRICS Digital Fiat

Russia’s Push for Digital Financial Assets and Cross-Border Trade

Source: Exclusive Dn/Adobe

The blockchain industry continues to gather pace globally, with Russia being one of the countries keen on embracing the benefits of this transformative technology. Russian business leaders are now exploring the use of “digital assets” and a “single digital currency” to facilitate trade with BRICS members and other “friendly” nations. This move comes as experts in Brazil have suggested that a BRICS digital fiat currency could be launched within the next five to 10 years.

The Russian Chamber of Commerce and Industry’s Council on Financial, Industrial, and Investment Policy has been actively discussing these matters. Yulia Prikhodina, the Council’s Deputy Chair, revealed that experts and Chamber members have put forward proposals to use “digital financial assets (DFAs)” in international payments. Additionally, discussions have taken place around the creation and adoption of a common digital currency for cross-border payments within the BRICS.

The Council also envisions the use of DFAs and/or a digital fiat currency to facilitate trade with the Commonwealth of Independent States (CIS) and the Eurasian Economic Union economic and political blocs. By utilizing DFAs or a common digital currency, Russia aims to ensure that export-import transactions are not disrupted, especially amidst ongoing Western-led sanctions targeting its trade.

The term “DFAs” has been used interchangeably in Russian political circles, leading to confusion among experts and the need for official terminology clarification. DFAs can refer to various types of assets, including digitized commodities, central bank digital currencies (CBDCs), digital securities, non-fungible tokens (NFTs), cryptoassets, and stablecoins like USDT and Bitcoin (BTC). Resolving these terminological nuances is crucial for promoting effective communication and understanding within the industry.

Collaboration is underway between the Council and the Plekhanov Russian University of Economics, with a focus on studying CBDC-related regulations and legislation in friendly countries. These countries include Belarus, Turkey, Kazakhstan, India, Iran, Mongolia, the UAE, China, and Qatar. Of note, Belarus has already expressed its willingness to align its CBDC plans with Russia’s digital ruble project, while China is exploring the interoperability of its digital yuan with various sectors.

In Russia, some sectors of the banking industry have initially expressed reservations about the central bank’s digital ruble project. However, signs are emerging that parts of the banking sector are now warming up to this initiative. Sinara Bank’s Retail Business Development chief, Alexey Lutsenko, acknowledges the need for banks to adapt to the new reality and embrace the digital ruble. This includes providing excellent service, educating clients about the benefits of the digital currency, and seizing the opportunities it offers.

The push for digital financial assets and a digital ruble-powered trade highlights Russia’s commitment to harnessing the potential of blockchain technology. As the country explores the use of digital assets and a common digital currency in cross-border transactions, it is paving the way for a more efficient and secure global trade ecosystem. By leveraging blockchain’s decentralized and transparent nature, Russia and its international partners stand to benefit from enhanced efficiency, reduced costs, and increased trust in transactions.

A map showing the member states of the Eurasian Economic Union (Crimea disputed). (Source: Maximilian Dörrbecker/Chumwa [CC BY-SA 2.5 DEED])

The adoption and implementation of digital financial assets and a common digital currency present exciting opportunities for both Russia and its trading partners. These initiatives have the potential to revolutionize traditional payment systems, eliminate intermediaries, and streamline cross-border transactions. With increased clarity in terminology and continued collaboration between industry stakeholders, the blockchain industry is poised to redefine how nations conduct business on a global scale.