November 30, 2020

THE RUSSIAN FEDERATION IS PREPARING FOR THE LAUNCH OF THE DIGITAL RUBLE

Following Japan, the Russian Federation also started talking about launching their own digital currency. Officials are considering opportunities and prospects for launching digitalthe ruble, which organizations and ordinary citizens will be able to pay for purchases of goods, services or transactions using financial instruments and digital financial assets (DFA). However, it will not be considered a cryptocurrency.

THE RUSSIAN FEDERATION IS PREPARING FOR THE LAUNCH OF THE DIGITAL RUBLE

It is known that already five Russian banks have declaredon their readiness to take part in testing the digital ruble, including Moscow Credit Bank (MCB), Promsvyazbank (PSB), Zenit and Dom.RF banks, as well as the Russian National Commercial Bank (RNKB).

According to the published report of the Central Bank of the Russian Federation onthe possibilities and prospects of issuing the digital ruble for wide public discussion, the Bank of Russia will be engaged in the issue of the digital ruble. It is known that each coin will have its own number and unique digital code, and will be equivalent to one Russian ruble.

Note that the Ministry of Finance of the Russian Federation did not stand aside and highlighted the main advantages of the digital ruble, including:

  • reducing the cost of transactions and reducing the burden on banks;
  • expanding opportunities for making international payments;
  • independence from the US dollar;
  • reducing exposure to US sanctions.
  • As for the shortcomings, the Ministry of Finance highlighted the following:

  • volatility;
  • the likelihood of using the digital ruble for illegal purposes;
  • lack of security.
  • To resolve these issues, the digital ruble mustbe provided, and operations with its use are carried out under the strict control of regulatory bodies, officials are sure. Most likely, you will need a special payment infrastructure and new types of services that will meet the requirements of the intergovernmental organization of the Financial Action Task Force on Money Laundering (FATF). Of course, the experience of international colleagues, the Ministry of Finance and the Bank of Russia are also taken into account.

    However, some specialists, in particularHead of the Laboratory "Research of the Monetary System and Analysis of Financial Markets" of the PRUE G.V. Plekhanov Denis Domashchenko is of the opinion that the digital ruble is unlikely to ensure the independence of the Russian economy from the US dollar. The situation can only change if the Russian ruble is stable.

    By the way, during a speech at the conferenceInternational Monetary Fund dedicated to cross-border payments, Federal Reserve Chairman Jerome Powell said that "the digital dollar is not a priority." The American regulator does not intend to issue a digital dollar, at least until all the risks associated with it are eliminated. Currently, the US dollar is the world's reserve currency, and since the launch of the digital currency is fraught with high risks.

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