A renowned Russian economist has posited that Russia’s embrace of digital currencies has significantly contributed to the stabilization of the ruble in recent times. This insight was shared by Oleg Vyugin, a professor at the National Research University Higher School of Economics, and reported by the Russian news outlet RIA Novosti on April 13.
**Crypto Leading to Less Reliance on Traditional Currencies?**
Vyugin, who has previously served as the head of the Russian Federal Financial Markets Service and as Chairman of the Moscow Exchange, made these remarks during an investment and trading conference. He suggested that the increasing utilization of cryptocurrencies by Russian businesses for international trade settlements has helped maintain the ruble’s stability. According to Vyugin, this shift towards digital currency transactions, which bypass the need for “hard currencies” like the USD, is reducing demand for traditional fiat currencies in international trade, especially in dealings with countries like China.
“We need to consider settlement factors. For instance, there is evidence that Russia employs cryptocurrency in settlements with China, implying there is no demand for dollars. The dollar is unnecessary for these transactions,” Vyugin explained. He further elaborated on the potential of alternative payment methods to lessen the demand for hard currencies, hinting at the broader implications of this trend for the global financial system.
**Central Bank’s Stance Remains Cautious**
Despite the growing interest from Russian businesses in using cryptocurrencies for cross-border trading—a move partly motivated by the desire to circumvent the financial restrictions imposed by the West following the Ukraine conflict—the Russian Central Bank continues to express its reservations about cryptocurrency adoption. The Central Bank insists on restricting crypto transactions within its regulatory sandbox, aiming to control the digital currency landscape closely.
This cautious approach by the Central Bank contrasts with the increasing calls from various sectors within Russia for a more open legal framework that would allow for wider use of cryptocurrencies in international trade. Such a framework is seen as crucial for enabling Russian companies to leverage digital currencies to their full potential, especially in the face of international sanctions.
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