Russian Central Bank starts Stablecoin Experiment

According to the head of the Russian central bank, the idea of digital currencies that are privately owned and not controlled by the government is not something that the institution would support. However, the central bank is keen on experimenting with stablecoins to discover their benefits and is actively researching the impact that a digital ruble would bring.

Reported by Russian news platform Interfax, the head of the Central Bank of the Russian Federation Elvira Nabiullina stated that the financial institution started experimenting with stablecoins pegged to real assets in a new regulatory sandbox. However, Nabiullina said that the bank will not consider the tested stablecoins as a new method for payments or that they will replace traditional fiat money.

Interfax reported the news on Wednesday, along with an additional statement in which Nabiullina announced that the experimentation was created as a way to explore the potential real use cases of stablecoins. Furthermore, the head of the Russian central bank stated: “We are testing stablecoins in our regulatory ‘sandbox’. 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.”

Besides testing stablecoins, the institution will continue its research of a national cryptocurrency that would turn the ruble digital. Before everything else, Nabiullina stated that they will first explore the experience and benefits of central bank digital currency (CBDC) in jurisdictions all over the world. Like other representatives of major central banks, Nabiullina noted that a CBDC would introduce not only benefits but potential risks that demand a reconstruction of the domestic financial market.

Despite actively researching the possibility of bringing cryptocurrencies into the legal and financial domain, Russians are attracted less by the idea of cryptocurrencies compared to two years ago, stated Nabiullina. Commenting on the push for private money that would not be controlled by the government, the head of Russia’s central bank stated: “We are against private money. If some digital currencies were designed to become a substitute for private money, we could not support that.”