War started in February 2022 by Russia for territorial expansion in Ukraine cannot see an end in the near vicinity. This war led to rigorous sanctions on Russia by the US and different European countries leading to an economic slowdown in Russia causing a fall in GDP and mounting inflation in the country.
Amid this, at an event with the officials of the New People Party, Elvira Nabiullina, head of the Central Bank, announced that the bank is planning to use digital assets for foreign business and trade purposes. But, importantly she mentioned that this utilization is only for businesses and trade purposes and does not allow citizens to use cryptocurrencies.
This process may lead boom in the crypto ecosystem since Russia plays a significant role in global trade. In the contemporary global order, India and China are playing a crucial role in establishing new dynamics. India imports a significant amount of oil from Russia while China also plays a significant role in trade relations with Russia.
India also launched a pilot project in a few cities including Delhi, Mumbai and Bengaluru. The Reserve Bank of India announced a graded CBDC this is a central bank digital currency launch in line with the country’s monetary policy and financial stability and can play a worthy role here. Thus, this announcement probably has a notable impact on the crypto ecosystem.
Apart from this, Russian President Vladimir Putin is also in favour of internationalizing of Chinese Yuan. In one of his interviews, he coined how two-thirds of the trade between China and Russia happens in Ruble and Yuan. Thus he advocated the use of Yuan for settlements of trade between Russia and countries in Asia, Africa and Latin Africa.
The announcement plays a significant role in the global economic order and crypto ecosystem. But this poses significant challenges regarding the regulation of cryptos, sovereign wealth and transparency of the process. It is crucial to keep an eye on the process of approach of the country in the direction.