The draft Law № 540256-8 “On Amendments to the Federal Law "On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation"” (hereinafter “Draft Law”) has been submitted to the State Duma.
The Draft Law has been submitted by a group of State Duma deputies from the CPRF party led by the head of the faction, G.A. Zyuganov.
The Draft Law introduces spot changes to the Digital Financial Assets Law1 in terms of the definition of the term “secured stablecoins” and the procedure for the use of secured stablecoins in foreign trade contracts.
Secured stablecoins are defined as digital assets that tend to maintain a stable value by being pegged to the gold exchange rate. At the same time the explanatory memorandum to the Draft Law further clarifies that stablecoins may maintain a stable value not only by being pegged to gold, but also to other assets (including fiat currency2, precious metals, etc.). Consequently, we assume that during consideration of the Draft Law the list of assets securing the stablecoins will be extended. We also expect that the legal status of stablecoins will be clarified – currently they are regarded as DFA but not explicitly named digital rights which are civil right objects.
The key change concerns the possibility of making settlements under foreign trade contracts in stablecoins. Thus, should the Draft Law be adopted, stablecoins could be used as means of payment or other consideration for goods, works or services under foreign trade contracts. Currently it is forbidden for Russian residents to accept DFA and digital currency as means of payment or other consideration3.
The Draft Law will allow to define within the Russian legal framework the stablecoins that exist on the world crypto market for a long time (the most known are USDT and USDC) and apparently, we will see those from Russian issuers. This will simplify international settlements under the sanctions pressure, however digital assets will not be used as a means of payment in the Russian territory, which Central Bank is concerned of as a threat to financial stability.4
1Federal Law № 259-FZ of 31.07.2020 “On Digital Financial Assets, Digital Currency and on Amending Certain Legislative Acts of the Russian Federation”.
2 According to a report by the Bank of Russia, the majority of existing stablecoins are pegged to fiat currencies. (see Development of the Digital Asset Market in the Russian Federation: Report of the Bank of Russia for Public Consultations. – URL: https://www.cbr.ru/Content/Document/File/141991/Consultation_Paper_07112022.pdf.).
3 Paragraph 5 of Article 14 of Federal Law № 259-FZ dated 31.07.2020 “On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation”.
4 Paragraph 1 of Decree No. 844 For more details see: Development of the Digital Asset Market in the Russian Federation: Report of the Bank of Russia for Public Consultations. URL: https://www.cbr.ru/Content/Document/File/141991/Consultation_Paper_07112022.pdf.