Russia’s Central Bank Trials Stablecoins In Regulatory Sandbox

News | December 27, 2019 By:

The Bank of Russia, the central bank of the country, has reportedly started testing stablecoins in its regulatory sandbox.

Elvira Nabiullina, Governor of the Bank of Russia, told Russian news service Interfax that the bank is only exploring how stablecoins work and do not assume them to function as a means of payment or become a substitute for money.

“We are testing stablecoins in our regulatory sandbox,” Nabiullina said. “We see companies willing to issue tokens pegged to certain real assets. In our regulatory sandbox, we are learning the potential uses of stablecoins but we do not assume that they will function as a means of payment and become a surrogate for money.”

The central bank governor also revealed that the bank is continuing to explore the possibility of issuing its own digital currency.

“Now such an opportunity is being actively discussed by many countries, we are also at the stage of studying this topic,” Nabiullina said. “First of all, we need to understand what will be the advantages for our citizens, for business, for example, compared with the option when we develop fast payment systems, expand them application not only for settlements between individuals, but also between legal entities.”

According to Nabiullina, the issuance of the digital ruble can have serious consequences in the form of changes in the structure of the financial market.

“If, for example, individuals are allowed to keep money in accounts with the Central Bank, this could significantly change the passive base of commercial banks,” Nabiullina said. “In some not very calm times, the flight of deposits and overflow of funds may begin.”

Nabiullina further said that the interest in cryptocurrencies in Russia has decreased over the past two years. However, she noted that there are people who sincerely believe in the possibility of private money without government involvement.

“You know, the ideology is also brought in here – in essence, the creation of a system of private money, without government intervention,” Nabiullina said. “We are against private money. If many digital currencies were designed as a replacement for private money, we cannot support this.”