The Bank of Russia is considering legalizing stablecoins for cross-border transactions as local businesses seek alternative methods to trade with China amid sanctions. Central bank deputy governor Alexei Guznov revealed in an interview with Russia’s state newspaper Izvestia that the proposal aims to regulate the process of transferring, accumulating, and using these assets for international payments.

While the initiative could evolve from an experiment to a permanent regulatory framework, no specific timeline for approval has been disclosed. Stablecoins, typically backed by assets and centrally issued, are seen as a solution to concerns that previously led the Bank of Russia to oppose digital assets. Recent shifts in the central bank’s stance reflect this new approach, especially as Russian metal producers have started using stablecoins for transactions with China due to traditional payment restrictions caused by sanctions.

There remain questions about international sanctions compliance. Tether, a major stablecoin issuer, has shown a commitment to adhering to sanctions policies by collaborating with Chainalysis to identify potentially risky or illicit wallets.