The Central Bank of Russia [CBR] and the country’s Ministry of Finance are at odds in determining the fate of digital assets. In the latest dialogue between authorities, the central bank has criticized the Treasury Department’s idea of supporting private stablecoins, which could be launched by private investors.
To provide some context, the Ministry of Finance started a conversation on Russian-based stablecoins. According to the director of the financial policy department, Ivan Chebeskov, the ministry preferred to allow the circulation of stablecoins in the country. These assets can be pegged to ruble, gold, oil or grain.
The official looked at the scope of crypto assets, blockchain technology, tokenization and digitization from the perspective of the Russian entrepreneurs. He noted that these advances could present an opportunity to build an entirely new financial system.
Ivan Chebeskov stated:†
“If a company, business or investor needs to pay or invest in this way, if they need a new tool, we will always support such initiatives. This is the right path to technology development. So in general yes.”
Bank of Russia has a different plan
The Central Bank does not recognize any legal tender other than the ruble in Russia. The only alternative to the ruble could be the digital ruble, a preferred option for private stablecoins. A CBR representative noted that the digital ruble was the preferred option for private stablecoins, “Combining all the advantages of a digital payment method with the reliability of a full-fledged currency.”
At the moment there is no digital ruble based on the blockchain available. However, it would be difficult to peg the stablecoin to the ruble. It would be weak compared to the dollar, and eventually one will also have to buy dollars to buy crypto.
Nevertheless, there was a lively debate between the regulators. Given the difference of opinion, the Ministry of Finance was preparing its version of the “On digital currency” bill. It will establish rules for the circulation of digital assets and the circle of participants.
Per reports†
“In one of the latest versions, a clause has also appeared that allows legal entities and individual entrepreneurs to use cryptocurrencies as a means of payment for foreign trade activities. But the use of cryptocurrencies as a means of payment in Russia will be banned – only buying and selling transactions in the form of investments through Russian banks and only for those customers who have been identified.”
Meanwhile, the central bank has opposed the legalization of cryptocurrencies. The CBR believed that cryptos threatened the well-being and financial stability of citizens and emphasized the risks of illegal activities. Nevertheless, the central bank agreed to support mining if mined digital assets were sold outside of Russia.
At the same time, it was interested in the introduction of a digital ruble. The platform prototype reached completion in December 2021 and testing began in January 2022. It is currently taking notes of issuance of the digital ruble, opening digital wallets, C2C transfers and C2B transfers. It was intended to begin real-time testing of the digital ruble for real money and customers in April 2023. We may have to wait and see what the Treasury Department has prepared in its bill.