Unanticipated move ahead: what awaits the USD in the upcoming days
The recent U.S. cryptocurrency regulatory developments, including the BITCOIN Act, the Clarity Act, and the GENIUS Act, are transforming the global crypto market landscape. While the direct impact on the Belarusian ruble is less immediate and more nuanced, these regulations are expected to have a significant indirect influence.
The BITCOIN Act, which endorses self-custody of Bitcoin and other digital assets, is set to increase institutional involvement with cryptos, potentially boosting liquidity, market confidence, and innovation in the crypto space. The GENIUS Act, on the other hand, aims to clarify regulations around stablecoins, digital currencies pegged to fiat currencies like the USD or the Euro. This is expected to foster trust and mainstream adoption of stablecoins, enhancing their role in faster, cheaper cross-border B2B payments and remittances.
The Digital Asset Market Clarity Act seeks to delineate regulatory authority between securities and commodities regulators, potentially reducing ambiguity for crypto platforms and their operations. Though some critics argue that the regulatory framework may be too permissive, overall it signals stronger federal oversight.
Collectively, these legislative efforts are likely to solidify the U.S. dollar's primacy in the digital asset ecosystem by integrating cryptocurrencies and stablecoins more closely with traditional financial systems. This influence is expected to ripple through global currency markets by accelerating adoption of regulated digital currencies and stablecoins internationally, affecting liquidity flows and currency exchange dynamics.
For the Belarusian ruble, the main effect is indirect. Rising U.S. regulatory clarity will enhance stablecoins and dollar-pegged digital assets' usage globally, potentially reducing demand for less liquid or less stable currencies like the Belarusian ruble in cross-border transactions or remittances. Belarus could see shifts in capital flows if local businesses and individuals increasingly prefer using crypto or dollar-pegged stablecoins for trade and remittances due to greater legal certainty in the U.S. and broader global acceptance.
If Belarus does not develop compatible digital asset regulations or CBDCs, it risks increased currency substitution by stablecoins, putting pressure on the Belarusian ruble’s demand and exchange rate stability, especially in trade and remittance corridors with Russia and the West.
In other news, the 18th package of sanctions against Russian and associated entities, including Belarusian commercial banks and defense industry enterprises, came into effect on July 19. These sanctions effectively prohibit transactions for Belarusian banks, which were already disconnected from the international payment system SWIFT in 2022.
The closing rate for the week was RUB/BYN 3.7354 for 100 Russian rubles, with the dollar rate ending the week with a minimal increase of +0.16%, closing at USD/BYN 2.9350. The Russian ruble is influenced by a scheduled meeting of the Bank of Russia's Board of Directors on July 25, with a high probability of another key rate cut at this meeting, with forecasts ranging from 1.00% to 2.00%.
Trading volumes for the Belarusian ruble against the Russian ruble were around average levels at 16,092.930 million rubles, while the average weekly trading volume of the US dollar against the Belarusian ruble was 51.667 million USD. The USD/BYN exchange rate on the Belarusian market is expected to stay around 2.915 - 2.935, while the Russian ruble exchange rate may slightly increase.
The recently passed US law regulates the circulation of stablecoins, which are digital coins tied to a recognized global reserve asset. Additionally, a bill regulating the circulation of cryptocurrencies in the US financial system was passed and signed into law at the end of last week. The law allows for the issuance of corporate digital currencies, likely based on the US dollar.
In conclusion, the impact of the new U.S. crypto regulations primarily bolsters the global cryptocurrency and stablecoin markets' legitimacy and institutional participation, which strengthens the U.S. dollar’s digital dominance. For the Belarusian ruble, the main effect is indirect—through changes in global stablecoin adoption and capital flows—potentially influencing currency demand and monetary dynamics. Belarus may face challenges unless it adapts its crypto regulatory stance to foster confidence and integration with these evolving global digital asset markets.
- The Digital Asset Market Clarity Act, designed to clarify regulatory authority between securities and commodities regulators, could increase institutional involvement in the cryptocurrency market, particularly in personal-finance institutions.
- As the recently passed US law regulates the circulation of stablecoins, which are digital coins tied to a recognized global reserve asset, this may encourage more individuals and businesses to invest in these stable digital assets, potentially impacting personal-finance strategies in international transactions.
