Russia’s Central Bank Works on Digital Ruble Plans, Sberbank Plans Crypto Launch In Partnership With JPMorgan

As central banks worldwide have geared up the process of experimenting with a central bank digital currency (CBDC), the Bank of Russia is discussing plans about Digital Ruble with other commercial banks in the country.

The banks have been discussing the role of regulator in the issuance of Digital Ruble. Besides, there are also looking at protect banks with issues like liquidity outflow and whether Digital Ruble can supplement the paper cash.

Local Russian publication Kommersant reported that the Bank of Russia’s deputy chairman Olga Skorobogatova had recent met with executives from some of the country’s top banks. The banks together have suggested different approaches for the issuance of Digital Ruble.

Olga also pointed out at some of the technological difficulties with the issuance and distribution of Digital Ruble. She added: “So far, not a single regulator has figured out how to restore rubles in case the smartphone is lost, for example, but precisely due to the fact that [...] technologies are developing, we understand for ourselves that this issue can be worked out at the second stage. [...] Technologically, this problem will have to be solved."

Also, the senior officials from the central bank are not comfortable on allowing private stablecoins pegged to the Russian Ruble. Sergei Shvetsov, a first deputy governor of the Bank of Russia, have suggested an absolute ban on private firms offering stablecoins.

On Monday, November 30, another Russian publication Prime reported that Shvetsov has referred to China’s regulations with Digital Yuan that prevent the issuance and circulation of any stablecoins backed by Digital Yuan.

Shvetsov said: “China put a blanket ban on any yuan-pegged stablecoins. I think that we are not far from that. The bank will suppress everything that is positioned as a means of payment. We proceed from the premise that the ruble is the means of payment of the Russian Federation.”

On the other hand, Russia’s largest state-owned bank Sberbank has unveiled its new crypto plans as the regulations arrive by January 2021. As per industry reports, Sberbank is planning to launch its own crypto trading platform and its own digital currency.

In a big revelation, Sberbank CEO Herman Gref has noted that the bank could likely issued its digital currency in partnership with Wall Street giant JPMorgan. JPMorgan has announced its own cryptocurrency JPM Coin back in February 2019 that aims at facilitating instant cross-border settlements for its global clients.

Gref explained that the law for “Digital financial assets” will go live by January 1. “From January 1, the law comes into force, we want to bring to the market our new blockchain platform, which will provide services for the purchase of digital financial assets,” he added.