By
Tolu Ajiboye
April 17th, 2024
The Russian Central Bank is working with corporate entities in implementing its digital currency – stablecoins backed by real assets.
The Russian Central Bank is testing stablecoins, which are backed by real assets. The testing is to occur within a regulatory sandbox that functions based on certain regulations. The Russian Central bank disclosed this recently when the Chairman Elvira Niabullina said:
“We test stablecoins in our regulatory “sandbox.” Companies come that want to issue tokens secured by some real assets. We in the “sandbox” look at how they can work, but we do not assume that they will function as a means of payment and become a money surrogate.”
The Russian Central Bank is working with corporate entities in implementing its digital currency. The sandbox allows the companies to participate in the testing round. It also allows them to run their digital currency projects without breaking any laws.
The Chairman’s statement also indicates that the stablecoins that are tested will not be used as a means of exchange in real-time. The Central bank is also considering creating a Digital Ruble which would be its Central Bank Digital Currency (CBDC).
Russian Central Bank Stablecoins Could Change Everything
The Chairman of the Central Bank warned that the issuance of the Digital Ruble will have serious consequences. They involve the Russian Financial structure. Elvira indicated:
“If, for example, individuals are allowed to keep money in accounts with the Central Bank, this could significantly change the passive base of commercial banks. In the conditions of some not very calm times, the flight of deposits and overflow of funds can begin.”
According to Elvira, Russia’s banking and economy likely to change with a new digital currency. However, they should first study other countries and ensure a gradual implementation of a Central bank digital currency. The Chairman of the Russian Central Bank said earlier in November that the Bank was studying China and Sweden as case studies. She also said that the Russian Central Bank is against the issuance of assets that will be used as private money:
“We are against private money. If many digital currencies were designed as a replacement for private money, we cannot support this,”
Other Countries Also Launching Their Digital Currencies
France leads the Eurozone in the creation of a digital Euro. The Bank of France will have its sandbox for the digital euro in the first quarter of 2020. François Villeroy de Galhau who is the Governor of France’s central bank said this on Dec. 4. Germany is following closely as well. This points to one fact: the cryptospace is here to stay.