May 12, 2024
Reviews

Digital national currencies – Goodbye America.

The Bank of Russia announced that it plans to issue digital rubles.
Their development will take about 2 years.

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  • Digital ruble - can become a new form of money along with cash and non-cash.
  • There is such a project in Europe for the euro.
  • In 3 countries - Uruguay, Ukraine and Ecuador - tests of the national digital currency have been completed.
  • Another 6, including China, South Korea and Sweden, are implementing pilot projects.

    • Such digital platforms (blockchain) allowmake direct transactions between national currencies, bypassing banking mechanisms. This makes it convenient for international payments to be made in national currencies,to convert each other, bypassing the dollar.

    Pros:

    1. Monopoly of the dollar in international paymentscreates many problems, including geopolitical ones, related to the fact that ruble settlements can, for example, be blocked. People can be subject to sanctions, accounts can be frozen. The introduction of digital currencies avoids these problems.
    2. Digital wallets will be opened by banks / central banks. With such a system, the Central Bank will fully control all financial transactions.
    3. It will limit the risk of reallocating funds to foreign digital currencies. The digital ruble will be issued by the Bank of Russia - this is not a cryptocurrency.
    4. In conditions when banks charge for transferscommissions, and the interest on deposits is getting lower and lower, many will want to use the digital ruble of the Central Bank both for transfers and for storage (bank bankruptcy insurance).

    Minuses:

    1. There can be a very decent outflow of money from accounts and deposits.
    2. The risks are increasing that cryptocurrency market traders will have to go to the gray market.

      China has already launched a digital yuan project, andthe launch of a digital ruble, and then, say, a digital rupee (a similar project was also discussed in India), will allow the BRICS countries to calmly pay each other without fear of sanctions related to the ban on payments in US dollars.

      PS
      "Protecting American Security from Kremlin Aggression Act of 2018."
      They blocked payments made in dollars by a number of large Russian banks: VEB, Rosselkhozbank, Sberbank, Gazprombank, Promsvyazbank and VTB Bank.

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