A Tether Replica in Russia?
The concept of a Russian ruble stablecoin has been gaining traction, with industry experts weighing in on the potential features and challenges of such a project. At the recent Blockchain Forum in Moscow, Sergey Mendeleev, founder of the digital settlement exchange Exved and previously of the sanctioned Garantex exchange, presented a compelling vision for a ruble-backed stablecoin, drawing parallels with the widely popular Tether (USDT).
Mendeleev outlined seven key criteria that he believes would be essential for a successful “Tether replica” in the Russian context. Notably, he stressed the need for untraceable transactions and the absence of Know Your Customer (KYC) checks, aiming to provide users with enhanced privacy and anonymity. This aligns with the current Russian regulatory landscape, which has shown a willingness to explore cryptocurrencies as a potential alternative to traditional financial systems.
Overcollateralization and Decentralized Exchanges
Drawing inspiration from the decentralized algorithmic stablecoin DAI, Mendeleev advocated for an overcollateralized model. He emphasized the importance of transparency, stating that “any person who buys it will understand that the contract is based on the assets that super-securitize it, not somewhere on some unknown accounts, but free to be checked by simple crypto methods.”
Mendeleev also proposed that a viable ruble-pegged stablecoin should be readily available on both centralized and decentralized exchanges, ensuring liquidity and facilitating seamless conversions for users. Furthermore, he argued for the inclusion of interest-bearing features, allowing holders to earn passive income through smart contracts.
Regulation: The Key Hurdle
While the technical feasibility of a ruble-backed Tether replica seems plausible, Mendeleev highlighted the significant obstacle posed by Russian regulation. Despite the desire for a decentralized, privacy-focused stablecoin, the current regulatory landscape is leaning towards greater control and centralization.
“Unfortunately, from the point of view of regulation, we are currently going in the absolutely opposite direction […] We are going in the direction of absolute centralization, not in the direction of liberalization of laws, but consolidation of prohibitions.” – Sergey Mendeleev
Mendeleev acknowledged that achieving user trust would be crucial for the success of a ruble stablecoin, emphasizing the need to establish it as a viable alternative to established players like USDT. He pointed to projects like the ruble-pegged A7A5 stablecoin and DAI‘s unblockable contracts as promising examples of existing technologies that could be leveraged for a Russian stablecoin.
The development of a ruble stablecoin remains a topic of active discussion in Russia. While the Bank of Russia is focused on its own central bank digital currency (CBDC), the digital ruble, there is growing interest in exploring the potential of stablecoins pegged to the Russian ruble. Ultimately, the future of such a project hinges on the ability to navigate the complex regulatory landscape and gain the trust of users.
