Digital ruble to help curb use of monetary surrogates,” Russia says in financial strategy document – ​​regulation

The introduction of a digital ruble will be among Russia's top digitalization priorities this decade, the country's financial market development strategy has confirmed. The document claims that issuing a digital national fiat will help the central bank prevent Russians from using “monetary surrogates,” as officials have previously called cryptocurrencies.

Bank of Russia will issue digital rubles by 2030, according to the financial market development plan

The strategy for the development of the financial market of the Russian Federation until 2030 was published this week by the Ministry of Finance. The plan will be open for public discussion between September 14 and October 13, 2021, according to a statement published through the state automated information system.

The strategy defines the introduction of a digital version of the Russian ruble as one of the priority tasks in the field of digitalization, as reported by crypto news agency Bits.media. The authors noted that the digital ruble will be the third form of money from the Central Bank of Russia (CBR).

The central bank digital currency ( CBDC ) is intended to facilitate the development of Russia's payment infrastructure and the introduction of innovative financial instruments. The digital ruble is also intended to increase the availability of banking services for retail and corporate customers while reducing transaction costs.

Moscow hopes the digital ruble will allow it to “continue to discourage the use of currency surrogates,” which are banned under current law. Russian regulators have previously described cryptocurrencies using this term. The Treasury insists that monetary surrogates pose a threat to money laundering and terrorist financing Risks for Russian citizens and at the same time hinder macroeconomic policy.

In addition, Russia plans to continue the development of its Mir payment system, the country's Faster Payment System and financial messaging system. The Bank of Russia will implement Suptech and Regtech solutions to analyze transactions and monitor regulatory compliance to more effectively manage risks and ensure information security. The document states:

In connection with the introduction of the digital ruble and the development of payment instruments, the Government of the Russian Federation and the Bank of Russia will continue to oppose the use of currency surrogates.

To ensure consumer protection, Russia will take into account the international standards of the Committee on Payments and Market Infrastructure, the International Organization of Securities Commissions and the Financial Stability Board, the strategy emphasizes. The digital ruble should allow authorities to better deal with crises and inflation while maintaining the stability of the Russian economy.

The publication of the financial market strategy comes after the Bank for International Settlements (BIS) recently urged Central banks to quickly develop their CBDCs to compete with private sector payments initiatives. At a financial forum in Slovenia, Benoît Cœuré, who heads the BIS Innovation Hub, warned that monetary authorities should accelerate their work on state-issued digital currencies because “stablecoins and cryptoassets are already here.”

Speaking to reporters last week, President Vladimir Putin's press secretary Dmitry Peskov stated that the Russian Federation is not ready to recognize Bitcoin, insisting that such a move would not bring any benefits to the country. In May, the deputy governor of the Bank of Russia Olga Skorobogatova announced that the CBR is preparing to unveil a digital ruble prototype by the end of 2021.

Do you think the digital ruble will limit the use of cryptocurrencies in Russia? Share your thoughts on this topic in the comments below.

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