Russian Central Bank has started testing of stablecoin pegged to real estate under its regulatory sandbox program. This prospect was revealed by the Chairman of the central bank, Elvira Nabiullina. The bank is studying the possibility of using stablecoins as a method of payment.
27 December, 2019 | AtoZ Markets – Stablecoins appear to be on the rise in recent months, and Russia is taking the next step by launching its stablecoin. Russian Central Bank has reportedly started testing Stablecoin secured by real assets in a regulatory sandbox. Companies can also test their products and services in this sandbox with a limited environment without risking breaking financial laws. The regulatory body oversees it.
Russia Tests Digital Assets
Elvira Nabiullina recently says about the bank’s plans and actions regarding digital assets. The bank has started testing a digital currency in a regulatory sandbox explicitly designed for companies, that want to issue digital tokens backed by real assets.
She also explained that the bank is now studying the nature of digital currencies. Whether they can function as a form of payment or become a money substitute. She also said:
“We test stablecoins in our regulatory “sandbox”. Companies can test who want to issue tokens backed by real assets. In the sandbox, we look at how they can work. But we do not assume that they will work as a means of payment and become substitutes for money”.
However, she also says that interest in cryptocurrencies in Russia has decreased in recent years. She also added that many people still firmly believe in this prospect. And it could be the creation of a private money system without government intervention.
Possibility of Introducing Russian Digital Central Bank Currency
“Now that many countries actively discuss such an opportunity, we are also at the stage of studying this subject. First, we have to understand what will be the advantages for our citizens, for business. For example, it compared to the option when we develop rapid payment systems, widening their application for settlements between people and legal entities. “
However, she also highlighted the challenges that such central bank initiatives pose for the stability of the financial system. She added:
“If, for example, individuals are allowed to keep money in central bank accounts, this could significantly change the passive base of commercial banks. In some periods, the flight of deposits and the overflow funds may start”.
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