Russia: central bank is testing digital currency in regulatory sandbox

In the past few months, the number of stablecoins supported by the government seems to have increased, and Russia is taking further steps to launch its own stablecoins. It is reported that the Russian central bank has begun testing digital currencies supported by physical assets in a regulatory sandbox .


Russia tests digital assets

Elvira Nabiullina, the governor of the Russian central bank, talked about the bank's plans and actions on digital assets yesterday. She said they have begun testing a digital currency in a regulatory sandbox specifically designed for companies that want to issue digital tokens backed by physical assets.

Nabiullina states that before the final product is shown to the public, they have a responsibility to know exactly what it can do and how it benefits participants:

"First, we need to understand what advantages this can bring to our citizens, such as what are the business advantages compared to instant payment systems, because the possible impact of the digital ruble will lead to changes in the structure of financial markets, outflows of deposits and funds Reallocation. "

However, she also said that Russian interest in cryptocurrencies has declined over the past few years. However, she added that many people remain convinced of its prospects that it could become "a private funding system created without government intervention."

2019-the year of CBDC

The central bank's digital currency (CBDC) began to receive widespread attention after Facebook announced the Libra stablecoin.

Earlier this year, the social media giant said that its digital assets will be used for global payments and will be supported by "asset reserves that give it intrinsic value." Although the project has met with strong opposition from regulators, it may have inadvertently started a new trend.

Russia's superpower neighbor China was one of the first countries to consider establishing a CBDC. Although the digital currency originally scheduled for launch in November did not materialize, the director of the Digital Currency Research Institute of the People's Bank of China recently said that government-backed digital assets will be launched soon. He also promised that the public's need for anonymity would be met, but that illegal activities such as money laundering would also be prevented.

Another example comes from Europe. The European Central Bank has released a new proof-of-concept project called EUROchain. Its research report states:

"EUROchain was developed by the European Central Bank and supported by Accenture and R3, based on distributed ledger (DLT) technology."

It is reported that the Corda platform based on R3 aims to study how to balance privacy through compliance procedures such as anti-money laundering rules, and DLT helps reduce transaction costs. As stated in the report, the EUROchain use case is based on a design that allows access to a central bank account and leverages reserve balances held by the central bank to provide users with central bank figures.

In addition, EUROchain is different from other stablecoin use cases, such as Facebook's Libra. EUROchain does not seem to study the use cases of individual consumers, but rather focuses on the innovative integration of enterprise blockchain in banking.