Considerations to Launch a Digital Currency: Central Bank of Russia

Founded in 1860, the Central Bank of the Russian Federation also known as the Bank of Russia is reportedly putting a launch its own digital currency in its plans for ‘one day’. At a student conference, the regulator’s Chairwoman, Elvira Nabiullina said that various central banks, including Bank of Russia, are investigating the possibility, but even at that, such a project “cannot be realized immediately,” TASS (a Russian news agency) reported Saturday. The Chairwoman also said the technology must ensure “reliability and continuity.” and this is critical to the utility of a central bank digital currency (CBDC), “Technologies must be mature, including technologies of distributed registries,” she added.

A CBDC is a digital currency issued by a central bank that has the status of legal tender and other properties of centralized, fiat moneyFrom Nabiullina ‘s comments, she questioned whether citizens are ready to operate a life without cash which is the implication of leading an economy with CBDC. “It will be more convenient, it is electronic money for people, for citizens. Are we ready, as a society, to refuse cash?” she asked. Many nations are still fond of physical money even as some nations have become almost cash-free, she said – not so much for illicit reasons, but because they value privacy and anonymity. Conclusively, Nabiullina adviced the central bank’s researchers urging that they juxtapose the advantages of CBDCs with other methods like fast bank payments and the likes.

Nabiullina had said just last month that, the central bank would consider the use of a gold-backed cryptocurrency to facilitate international settlements. She said at the time that the Bank of Russia would review a proposal for the development of the cryptocurrency also according to reports by Tass. In addition, Nabiullina stated that fiat currency settlement systems within the Eurasian Economic Union have shown improvement and already have “good dynamics.” Russia’s lower legislative house, The Duma, is also moving towards passing cryptocurrency legislation. They had projected completion timeline by the start of this spring session but it is looking unlikely to be met. Still, all of these and more show that Russian authorities have softened towards the tech more recently, given their prior stance of being crypto-skeptical.

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Credits- Daniel Palmer

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