Russia’s Asset-backed Stablecoins Enter Testing Stage

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On December 25, Interfax, a media news outlet in Russia, reported that the country’s central bank had established a regulatory sandbox. Notably, the project aims to explore the potential benefits of asset-backed stablecoins to the general public.  

However, despite confirming that the stablecoins had entered the testing phase, the head of the Bank of Russia, Elvira Nabiullina, emphasized that the bank officials do not guarantee that the stablecoins would function as an alternative for real money. Furthermore, they are not sure as to whether they can be used as a medium of payment as well. 

Nabiullina explained that the central bank’s stablecoin regulatory sandbox initiative is still in its infancy and that they are still experimenting on the potential use cases. However, she stressed that one of the primary goals of the bank is to combat the volatility that is always associated with the crypto industry. It is the reason why they decided to peg the stablecoins to real-life assets. 

Aside from exploring the potentials of asset-backed stablecoins, the Bank of Russia further confirmed its intention to explore CBDC (central bank digital currency). Nabiullina said that they are aware of the global phenomenon. However, she emphasized that at this moment, they are taking the side of a spectator, watching intently how other nations are dealing with their respective CBDCs. Gaining knowledge and insights from the other countries’ experiences would help Russia gain an extensive understanding of the matter, Nabiullina explained. 

No to Private Money

Russia, as Nabiullina has confirmed, is seriously analyzing the potential consequences that might surface following the release of a digital ruble especially in the country’s financial market structure. While the bank is aware that cryptocurrencies had dramatically lost their appeal to the Russian citizens in the past 2 years, Nabiullina noted that there are still people in the country who believe that private money is the answer to the country’s pressing financial-related problems. 

However, Nabiullina clarified the central bank’s stance on private money. She warned that if they discovered that a digital currency is designed as an alternative form of private money, they wouldn’t support it.

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