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Bank of Russia is Considering Gold-backed Cryptocurrency Soon1 min read

Elvira Nabiullina, the head of the Bank of Russia, revealed that the bank may be interested in creating a gold-pegged crypto for conducting mutual settlements with global jurisdictions.

As far as settlements are concerned, we will consider your suggestion regarding what a cryptocurrency backed by gold would look like  she told the committee.

Nabiullina has pointed out that it is very crucial to establish global settlements using national currencies. During the recent State Duma meeting, the bank’s governor specified a successful instance of using domestic currencies in settlements under the platform of the Eurasian Economic Union (EAEU), noting that the initiative indicated good undercurrents.

If national currency that works in the entire country is concerned, this does not refer to any private assets, and certainly this requires a technology that would ensure reliability and uninterrupted operations. These technologies should be mature including blockchain technologies, she added.

In April 2019, the Bank of Russia released a policy brief on the potential benefits and disadvantages of central bank digital currencies (CBDCs). According to the bank, CBDCs could be a less risky and more liquid type of asset that can potentially reduce transaction costs in the economy. On the other hand, the bank outlined CBDCs’ lack of anonymity as the only one potential disadvantage as compared with cash.

The Duma, Russia’s lower legislative house, is also moving towards passing cryptocurrency legislation, although a projected completion timeline of this spring session is looking unlikely to be met.

Following the Bank of Russia, an adviser to the President of Russia had previously suggested that launching a CBDC in Crimea could help the region to attract more investors and avoid sanctions.

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