Bank Of Russia Announces Possible Central Bank Digital Currency Launch, But Not Anytime Soon
- The head of the central bank of Russia discussed a future launch of a central bank digital currency.
- One of the main disadvantages cited in reports is the lack of anonymity involved with digital assets.
Cryptocurrency is expanding to regions around the world, though every country has different ways of handling it. Some countries have created regulations that are more suitable to development in their economies, but central bank digital currencies (CBDCs) are slowly gaining momentum. These assets are typically a type of digital currency that is issued by the bank, but with all of the properties of centralized fiat currency. New reports from TASS indicate that Russia’s central bank is considering this type of asset, but the actual launch will not be for a while.
Elvira Nabiullina, the head of the Bank of Russia, spoke at a student conference in Skolkovo, stating that realizing a CBDC is not a possibility at the moment, but there are many central banks inside and outside of Russia that are looking into this possibility. Reports indicate that she also spoke about the need to secure how strong the technology is before it can be used for any possible CBDC realistically.
“If we are talking about a national currency that works as a whole in the country — that is, not about private assets — of course, this requires the technology to provide reliability and continuity. Technologies must be mature, including distributed ledger technologies,” said Nabiullina.
The bank head also spoke about the connection between the rise of CBDCs at the same time that debates are going on regarding the implementation of cash-free options for banks. She added that there are some jurisdictions that are already making the efforts to go cashless, though the demand for actual cash is higher in some regions. In the latter regions, the locals prefer to have a certain level of anonymity.
As more customers end up getting involved with digital currencies independently, Nabiullina stated that these volumes are a sign of “some sense of society’s readiness.” As Nabiullina sees it, researchers focused on CBDC should consider the advantages of issuing such assets, weighing them against how other technologies could benefit customers, like fast payment systems.
The Bank of Russia recently released a brief on the policies surrounding CBDCs, which indicate that there could be a way of issuing a less risky and more liquid asset instead, reducing the cost of performing these types of transactions in the economy. Still, the brief zeroed in on a major disadvantage to call – a lack of anonymity.
Last month, Nabiullina indicated that the central bank of Russia was interested in created a cryptocurrency that is pegged to gold, helping with mutual settlements around the world with other jurisdictions. Also, in the same month, government-backed RT stated that there are ongoing discussions between Venezuela and Russia that are discussing the possibility of using the Russian ruble and the Venezuelan Petro crypto asset as a way to close mutual trade settlements.