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Central bank of Russia is now testing with stablecoins

Central bank of Russia is now testing with stablecoins

The Bank of Russia, the country's central bank, has reportedly started a pilot for stablecoins pegged to real assets in a regulatory test environment. The head of Russia's central bank, Elvira Nabiullina, said that the bank doesn't expect that those stablecoins will replace current currencies as a means of payment or become a substitute for money.

Nabiullina stated that the Bank of Russia is exploring the potential uses of stablecoins, cryptocurrencies that are pegged to another asset to prevent the volatility of crypto markets. Nabiullia said:
"We are testing stablecoins in our regulatory 'sandbox'. We see companies willing to issue tokens pegged to certain real assets. In our regulatory sandbox, we are learning the potential uses of stablecoins, but we do not assume that they will function as a means of payment and become a surrogate for money."

Intend to explore CBDC's based on global experience

The central bank is also going to examine the possibility of issuing its own central bank digital currency (CBDC), the digital ruble. The head of the bank underlined that the institution first wants to understand the potential of CBDC's based on the experience of other jurisdictions. However, Nabiullina warned that the issuance of a digital ruble could have serious consequences. Including shifts in the financial market structure.
“Cryptocurrencies have lost interest in Russia during the past two years”
The head of Russia's central bank noted that the prevalence of cryptocurrencies in Russia has dropped over the past two years. However, some people still believe in the option of private money without third party involvement. Regarding this issue, the official stated: "We are against private money. If some digital currencies were designed to become a substitute for private money, we could not support that." The recent news comes in line with earlier public announcements from the Bank of Russia. It was reported that the bank was exploring the opportunity to launch a CBDC in June 2019. However, the authority doesn't expect to roll out such initiatives in the near future.

While Russia is planning to follow other countries in testing CBDCs, France is poised to become the first global jurisdiction to pilot its own digital euro. On Dec. 4, François Villeroy de Galhau, the governor of the Bank of France, announced that the bank intends to start testing the digital euro project by the end of the first quarter of 2020.