Silk Road Briefing | 10 April 2023
Eurasian Economic Union discusses launch of digital currencies in EAEU financial markets
An EAEU digital currency agreement would impact China and South East Asian trade
At a meeting of the Eurasian Economic Advisory Committee on Financial Markets of the EAEU bloc in Moscow, chaired by Bakytzhan Sagintayev, Ministers discussed the issues of harmonizing legislation in the financial sector.
Sagintayev is the Chair of the Presidential Administration of Kazakhstan, and served as Kazakhstan President from 2016-19.
The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. It has trade agreements with China, (currently non-preferential but in the process of being re-negotiated) Iran, Serbia, and Vietnam. Numerous other countries, including India and Indonesia, are currently discussing EAEU FTA, meaning an EAEU digital currency agreement will impact on trade with each of these countries. Kazakhstan’s Eurasian Bank made its first successful trial of its Digital Tenge cryptocurrency in September 2022.
“The formation of harmonized requirements for the regulation and supervision of financial markets is one of the important conditions for the free movement of capital,” Sagintayev stated.
Discussions centred on the preparation of draft agreements concerning the development of integration in the insurance sector. The meeting also considered issues related to the acquisition of an OSAGO state insurance policy by citizens of the EAEU countries, as well as restrictions and obstacles related to opening brokerage accounts.
The members of the Advisory Committee reviewed the implementation of the Digital Tenge projects of the National Bank of Kazakhstan and the Digital Rouble projects of the Central Bank of Russia.
The main advantages of introducing digital currencies are in providing access to efficient and secure payments, increasing the availability of payment financial services and improving control over the spending of budget funds. The launch of digital currencies within the EAEU may still be some time off – estimates suggest 2024 – however the process is underway.