Russia’s Central Bank Mulls The Option to Launch a State-Backed Cryptocurrency

Last Saturday, June 15, Russia’s local news agency TASS reported that Russia’s central bank is mulling out options to launch its native cryptocurrency. Elvira Nabiullina, chairwoman of the Central Bank of Russia, told the publication that the bank is investigating different possibilities and “opportunities”.

Nabiullina stated that such a project “cannot be realized immediately”, however, launching a central bank digital currency (CBDC) noted that the technology backing it should ensure “reliability and continuity”. She further added that “Technologies must be mature, including technologies of distributed registries. The main purpose would be to keep a ledger of registries for the bank, but could expand to monetary policy.”

She further states that although having a digital currency will be convenient for the citizens and people, but adds that is the society willing to give up cash? She notes that even though some of the digital economies have given up cash completely, others still prefer physical money as people still value their privacy and anonymity.

Nabiullina added: “It’s not so much because people want to perform some dubious operations. People often value their privacy, anonymity. Of course, the spread of non-anonymous digital currencies indicate in some sense society’s readiness."

However, she also had advice for the researchers of the Bank of Russia. She stated that before considering the option for launching a CBDC, they should also weigh-in other options of fast track payments.

However, one thing is sure that being critical of digital currencies for a long time, Russian authorities seem to be taking the tech a lot more seriously now.

It was just last month that Nabiullina also proposed the idea of having a gold-backed digital currency in order to facilitate international settlements. Speaking at the Russia lower house Duma, she said: “As for mutual settlements, we will consider, of course, [the] proposal on … a gold-backed cryptocurrency. But, in my opinion, it is more important to develop settlements in national currencies”.

However, she added that despite having a gold-backed digital currency, the central bank is against the use of cryptocurrencies in Russia’s monetary system.

Russia has remained a lot whimsical on its stand for digital currencies over the last few years. On one hand, it is considering the use of digital assets to avoid the U.S. sanctions while at the same time it is also skeptical of its impact on the country’s monetary system.