Russia designates USDC as an approved tradable crypto asset

I saw news that Russia designated USDC as an approved tradable cryptocurrency, so let’s ask Chappy to explain it in detail 😺

The news that Russia intends to add USDC to its official list of authorized tradable cryptocurrencies is a highly noteworthy development. Until now, Russia had been cautious about Western-issued stablecoins like USDC, but its stance appears to be shifting.

Bitget, and 1 other

① What was decided

Deputy Finance Minister Ivan Chebeskov of Russia indicated the intention to include widely recognized and globally used cryptocurrencies in the authorization list, specifically naming

Bitcoin (BTC)

Ethereum (ETH)

Tether (USDT)

USDC

were cited. According to the approval criteria, major cryptocurrencies with an average market capitalization exceeding approximately 5 trillion rubles (about $70 billion) over the past two years are eligible.

Why approve USDC?

The primary reason is the need for international settlements.

Since its invasion of Ukraine, Russia has faced severe restrictions on access to global payment networks due to Western financial sanctions. As a result,

trade settlements with foreign companies

payments for imports and exports

as an alternative to dollar-denominated transactions

Russia is increasingly turning to cryptocurrencies and stablecoins.

USDC, in particular, is a widely used stablecoin among institutional investors and corporations globally, as its issuer, circle.com, strongly emphasizes transparency regarding its US dollar reserve assets.

However, there are contradictions as well.

Interestingly, there is also caution within the Russian government toward USDC.

USDC is a centralized stablecoin, and its issuer, Circle, has the authority to freeze specific wallets.

For this reason, the Russian Ministry of Finance previously

expressed concern that 'USDC and USDT, issued by U.S. companies, carry the risk of Russian-related assets being frozen based on political decisions.'

In fact, Russia is also discussing proposals to impose additional fees on Western-issued stablecoins.

In other words,

We want to use it because it’s highly convenient ⬇️

But it’s dangerous because it’s under the control of a U.S. company.

This creates a dilemma.

④ Impact of this news on the cryptocurrency market

For USDC,

this is positive news.

The reason is,

Its global adoption will expand.

Its potential use in international trade will increase.

It can compete in the stablecoin market, currently dominated by USDT.

That's the key point.

Competition with USDT

Currently, USDT holds an overwhelming market share in international remittances.

However, if Russia also approves USDC, businesses and investors will face the choice:

“Use USDT?” or “Use USDC?”

will become selectable.

My analysis

The most important point about this move is not that 'Russia has grown fond of USDC.'

Rather,

Even nations under sanctions need highly liquid, dollar-denominated stablecoins in the global market.

That's the key point.

I believe this suggests that dollar-denominated stablecoins (USDT, USDC) could become even more critical as international payment infrastructure in the future crypto asset market.

This is quite remarkable, especially as the EU is rejecting U.S. stablecoins 😺

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