Russian Central Bank in no hurry to create digital currency

Nearly four months ago, the Russian Central Bank was supporting the idea of the country creating its own digital currency. That no longer appears to be the case as it was reported on October 10 that the chairwoman of the Bank of Russia recently explained that there is no real “obvious” need to create such a currency.

Elvira Nabiullina, who was speaking at the Finopolis forum of innovative financial technologies, issued a statement at the forum where she stated:

As Russia’s Central Bank, we have been studying this topic and the need to issue a national cryptocurrency is not obvious for us. Not only for technological reasons, but also because it is (difficult) to really estimate what advantages will the national digital currency give, for example, in comparison with existing electronic non-cash payments. There are many risks, and the advantages may not be obvious enough.

Nabiullina has continuously rejected the idea that cryptocurrencies should be legalized as a form of payment. However, when Nabiullina was speaking before the Russian Duma in May, she explained that the central bank would not be against the idea of implementing a cryptocurrency issued by the government, as long as it was backed by gold. “As far as settlements are concerned, we will consider your suggestion regarding what a cryptocurrency backed by gold would look like [in this setup]. In my view, however, it is still more important to develop settlements in national (fiat) currencies.”

Despite her earlier comments, this seems to have put to rest the idea that Russia will soon be offering its own virtual currency. Even when she appeared before the Duma she had explained that this idea could not be “realized immediately.”

While Russia seems skittish to the idea of creating its own currency, the Central Bank of China is about ready to launch its own digital yuan by the end of this year, early next year at the latest. The European Union also looks to be moving in this direction. Germany’s finance minister, Olaf Scholz, recently stated that he would be in favor of a national digital Euro to be implemented soon. This also comes a time when the Central Bank of Switzerland is also looking into the idea of creating a blockchain-based digital currency.

For Russia, this looks like they are rejecting an idea that seems to be almost certainty for many countries in Europe and Asia. However, as long as Nabiullina is running the central bank, no one should expect a policy change anytime soon.

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