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Russia uses regulatory sandbox to test stablecoins, might create CBDC

By:
on Dec 27, 2019
Updated: Mar 11, 2020
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  • The Russian news outlet, Interfax, recently reported that the country's central bank is testing the impact of cryptocurrencies in a regulatory sandbox.
  • The Bank of Russia's head, Elvira Nabiullina, stated that the bank is interested in the effects of crypto, as well as in the development of CBDC.
  • For now, there are no plans to even start the development of a national coin, but the bank would like to see the advantages and disadvantages of it.

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According to recent reports from Russia, the country’s central bank seems to have started conducting regulatory sandbox tests on stablecoin pegged to real estate. Furthermore, the country seems to be following in China’s footsteps, with potential plans to start its own CBDC.

The Bank of Russia’s head, Elvira Nabiullina, was asked about this by the country’s local news outlet, Interfax. She said that the regulatory sandbox allows the bank to test various products and services in a safe, limited environment. That way, it does not risk violating any financial laws. Furthermore, all of their tests are under the financial regulator’s supervision.

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Bank of Russia interested in the concept of CBDC

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Nabiullina went on to explain that the bank is interested in studying the nature of cryptocurrencies. Their goal is to see whether or not they can act as a payment method and become a surrogate for traditional forms of money. They do not assume that cryptos could function in this way, but they still wish to test the digital currency’s capabilities.

She also revealed that the bank is interested in looking into the concept of CBDC. However, before they do so, they need to know whether there are any potential benefits for the country’s citizens and businesses, and whether the current issues require it, or if they could simply be solved by developing a faster payment processor.

Of course, the bank is also ready to compare the advantages against the disadvantages. One such disadvantage in the Bank of Russia’s eyes is the fact that commercial banks would become largely redundant if crypto became a substitute for money.

Earlier this year, Nabiullina stated that Russia doesn’t have any obvious need for its own national crypto. Back then, she also noted that estimating the advantages of using crypto would be difficult. However, it would appear that the bank’s head has since changed her mind.

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