“Also, redemption at the face value of the assets in the collateral is not guaranteed, and in fact the price of the stablecoin is not stable.”

The remarks contrast an earlier statement by Ivan Chebeskov, the Minister of Finance, who raised reservations about cryptocurrencies in general at a recent panel discussion on the impact of Web3. Despite his reservations, Chebeskov was receptive to the notion of a Russian-backed stablecoin.

Stablecoin supported by Russia

Stablecoins, according to Chebeskov, might be used as a "tool" to minimize expenses and other associated business frictions. He noted that if the risks are modest, the Ministry "would always support" a government-backed stablecoin.

He stated that a product may be backed by a tangible object such as the ruble, gold, oil, or grain.

“If there is a need for businesses, companies or investors to settle, invest in a new way, if they need such a tool, because it reduces costs, works better than previous tools, and if the risks associated with it can be limited, we will always support such initiatives.”

Despite Chebeskov's openness to the proposal, the unidentified CBR representative insisted that the ruble remains Russia's sole legal money. A possible compromise would be to create a ruble-backed stablecoin, which would combine the benefits of stablecoins with the "reliability" of the ruble.

“Combining all the advantages of a digital means of payment and the reliability of a full-fledged currency.”

Russia is turning to cryptocurrency in the face of harsh sanctions.

Since the advent of unrest in Eastern Europe, Russia has reversed its earlier anti-crypto attitude, which appeared to be going toward an outright ban at one time.

Observers blamed the turnaround on sanctions, which had cut the country off from foreign trade.

As a result, Russia has grown more receptive to cryptocurrencies, including conversations of legalizing them as a form of payment.

The On Digital Currencies law proposed by the Ministry of Finance aims to provide a legal framework for cryptocurrencies, including requirements for circulation and exchange registration.

However, the newest draft, according to the Russian language daily Vedomosti, enables individuals to use crypto as a means of payment only for overseas commerce, while their usage domestically (as a means of payment for goods and services) would be prohibited.