Officials at Russia’s central bank have ruled out private stablecoins pegged to the ruble, suggesting instead the country will follow the Chinese model of regulating stablecoins.
According to statements from senior representatives at the bank, technical problems with issuing a digital currency, alongside practical issues around usage means Russia will not approve stablecoins from private groups pegged to fiat currency.
Suggesting the digital ruble will be used in payments only, first deputy governor Sergey Shvetsov said the Chinese model for its digital yuan was a better template for Russia in exploring a central bank digital currency.
“China has completely banned any stablecoins pegged with the yuan. I do not think we’re far from that. The central bank will suppress everything that is positioned as a means of payment. We assume that the ruble is the means of payment of the Russian Federation.”
His colleague Olga Skorobogatova went further, saying that issues such as the difficulty in recovering lost digital currency, were contributing factors in shaping the bank’s policy approach to private stablecoins.
“So far, no regulator has been able to figure out the restoration of rubles in case the smartphone is lost, for example, but mainly due to the fact that these emerging 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, but I think it is solvable.”
Following the Chinese model, the bank has said Russia will issue a central digital ruble for use in payments only, with an outright total ban on other private digital currencies pegged to the ruble.
The news will be a blow to projects like Facebook’s Libra, and similar efforts by some of Russia’s largest commercial banks to develop stablecoins for use in the country.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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