State-backed stablecoins appear to be on the rise in the last several months, and Russia is taking the next step into launching its own. The country’s central bank has reportedly started testing digital currencies backed by real assets in a regulatory sandbox.
Russia Tests Digital Assets
The head of the Central Bank of Russia, Elvira Nabiullina, recently spoke about the bank’s plans and actions towards digital assets. She indicates that they have started testing a digital currency in a regulatory sandbox explicitly designed for companies that want to issue digital tokens secured by real assets.
Nabiullina notes that before the end-product is presented to the public, they have a responsibility to know exactly what it could do and how it can benefit the participants:
“First of all, we need to understand what will be the advantages to our citizens, for business, for example, compared to instant payment systems, because the issue of the digital ruble can have serious consequences leading to changes in the structure of the financial market, deposits outflows, and funds redistribution.”
However, she also says that the interest in cryptocurrencies in Russia has decreased in the last few years. Yet, she adds that many people still believe strongly in the prospect and that it could be “the creation of a system of private money without government intervention.”
2019 – The Year of The CBDC
Central bank digital currencies (CBDCs) started receiving significant attention after Facebook’s announcement regarding its stablecoin called Libra.
Earlier this year, the social media mogul said that its digital asset will be used for global payments and will be backed by “a reserve of assets designed to give it intrinsic value.” Even though it met severe backlash from regulators and watchdogs, Facebook’s project may have inadvertently started a new trend.
Russia’s superpower neighbor, China, was among the very first to consider a CBDC. Even though the planned November launch didn’t happen, the head of the People’s Bank of China’s digital currency research institute, recently said that such a government-backed digital asset is coming. He also reassured that the public’s need for anonymity would be met, but the coin will also protect against illicit activities such as money laundering.
Another example recently came from the E.U. An official draft document suggested for an upcoming public digital currency in collaboration with the European Central Bank.