Russia drafts law to use digital assets for cross-border payment
The Russian parliament has released a draft law as part of an experimental regime supporting the use of digital assets for cross-border payments to aid sanctions. Because Russia cannot use dollars and euros for payments, many transactions are settled in foreign currencies, even though contracts are denominated in euros and dollars. This creates considerable foreign exchange risk. An alternative is to exchange assets instead of using currency or bartering. A more efficient approach is to tokenize precious metals and other assets and use them for settlement. Russia has a legal framework for digital financial assets, which are tokenized traditional financial instruments or real-world assets. To date, a handful of institutions, including Sberbank, have tokenized trade finance debt and precious metals. However, these tokens are not meant to be used for payments. Therefore, additional legislation is required to allow their use in cross-border settlements
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