Nikolas Sargeant
Cross-border crypto trade deals "make no use of hard currencies," notes HSE Professor Oleg Vyugin, potentially reducing demand for dollars.
A prominent Russian economist suggests Moscow's increasing cryptocurrency adoption could be playing a significant role in the ruble's recent stability. These observations came from National Research University Higher School of Economics (HSE) Professor Oleg Vyugin, as reported by Russian newspaper RIA Novosti on April 13.
Cryptocurrency Usage Could Be Driving Russian De-dollarization
Vyugin, who previously headed the Russian Federal Financial Markets Service and chaired the Moscow Exchange, shared his insights during an investments and trading conference. He pointed to a possible increase in cryptocurrency-based foreign trade settlements by Russian companies as a stabilizing factor for the national currency.
The professor explained that cryptocurrency transactions bypass traditional "hard currencies," potentially contributing to decreased demand for USD and other fiat currencies. "We need to take settlement factors into account. For example, we have information that Russia uses cryptocurrency in settlements [...] with China. That is, this means that there is no demand for dollars. The dollar is not needed to carry out these settlements," Vyugin stated.
While acknowledging that such settlements remain "very difficult" to process, he questioned the relevance of the dollar in these trade arrangements, adding: "Using alternative forms of payment can reduce demand for hard currencies, and it is possible that this factor is also at play."
Declining Demand for Yuan and USD in Russian Markets
Vyugin admitted his claims were "an assumption" but suggested cryptocurrency adoption might also be affecting demand for other fiat currencies, including the Chinese yuan. RIA Novosti noted that yuan exchange rates on the Moscow Exchange have been steadily declining for several months.
Exchange data reveals yuan prices have fallen 22.4% from their November closing levels of 14.5 rubles ($0.17). As of trading close on Friday, April 11, the Chinese currency was trading at approximately 11.25 rubles ($0.14) in Moscow.
Similarly, the Russian Central Bank's official dollar exchange rate has dropped from 109.58 rubles to 84 rubles during the same period, representing a 23.3% decrease since late November.
Russian Central Bank Maintains Opposition to Cryptocurrency
Despite growing calls from Russian lawmakers to grant companies greater freedom in conducting crypto-powered cross-border trades, the Central Bank remains firmly opposed to widespread cryptocurrency adoption. The bank prefers to restrict companies to operating within its official cryptocurrency payment sandbox.
However, an increasing number of domestic businesses, including a major logistics company, have urged Moscow to develop legal frameworks allowing more firms to use cryptocurrency as an international trade settlement tool.
Analysts believe Russian companies began seriously utilizing cryptocurrency in response to sanctions imposed by the US, UK, and EU following the outbreak of war in Ukraine in February 2022.
