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In early October 2019, the chairman of the Bank of Russia Elvira Nabiullina, during a speech at the Finopolis forum, announced that the country does not need a digital ruble. To the surprise of the Russian participants in the crypto community, after only a year, its position has changed dramatically. So, in October 2020, during a speech at the Russia Calling! Forum, the banker voiced the opposite statement to the public – about the benefits of introducing a digital version of the national currency.
The editorial staff of BeInCrypto decided to find out how and why the regulators of the Russian Federation radically changed their opinion and the vector of action over the year.
Prerequisites for the emergence of a digital version of the ruble
While Elvira Nabiullina was actively promoting the Central Bank’s fast messaging system (SBP) as an alternative to issuing a national cryptocurrency, regulators in other countries were actively working on creating digital versions of fiat.
For example, the “sand dollar” was released in the Bahamas. Local regulators position the financial instrument as a national currency with international potential.
In parallel, work on their own virtual versions of national currencies was initiated in China, America and a number of other countries..
Rejection of the trend could lead to the isolation of Russia in the financial market due to the banal absence of a financial instrument. The risk of lagging behind other countries still forced the Bank of Russia to study the prospects for the digital ruble.
The fact that the financial regulator launched a public consultation on the issue of the central bank digital currency (CBDC) became known in mid-October 2020.
The press secretary of the Russian President Dmitry Peskov came to the aid of the financial regulator, whose representatives were accused of delay. In an interview with RIA Novosti, at the end of October 2020, he said that Russia was in no hurry to replace the ruble with its digital counterpart..
According to Dmitry Peskov, the Russian Federation uses the experience of other countries in the issue of crypto versions of national currencies, so as not to repeat their mistakes..
At the same time, when exactly in the Russian Federation the crypto-ruble will appear is unknown. Earlier, the editorial staff of BeInCrypto discussed with experts the impact of the new financial instrument on the country’s economy.
Interesting fact! For the first time, information about a possible issue of a digital ruble appeared on the network in the summer of 2017. During this period, Vladimir Putin met with one of the founders of the second largest cryptocurrency, Ethereum, Vitalik Buterin, at the St … Petersburg International Economic Forum. According to media reports, the developer was subsequently offered to lead the project to create the national cryptocurrency of the Russian Federation, but he refused.
Read also: What the crypto-ruble will give Russia – we understand the issue with the experts
The year of regulation and its consequences
The issue of a new financial instrument is impossible without creating a legal basis for it. Work in this direction has been carried out in Russia since 2017 – it was during this period that the President of the country, Vladimir Putin instructed officials to form the necessary amendments for digital assets.
Unfortunately, the deputies, for a long period of time, could not come to a common solution to the problem. At first, regulators were arguing about acceptable terminology. Later, questions arose about the penalties that would need to be applied to violators. For example, in one of the versions of the bill, the guilty users of cryptocurrencies were proposed to be imprisoned.
Fortunately, 2020 has solved many questions. After lengthy disputes, the deputies still managed to agree, thanks to which, on July 31, 2020, Vladimir Putin signed the law on digital assets and cryptocurrency.
The document will enter into force on January 1, 2021. According to him, the cryptocurrency will receive legal status. At the same time, the owners of digital assets will not be able to use them as an alternative to the ruble. Earlier, the editorial staff of BeInCrypto considered in detail how the life of Russian participants in the crypto community could change from the new year.
Read also: Is bitcoin banned in Russia today and how will its position change in 2021 – experts answer
Russians were not against digital payments
Against the backdrop of regulation, Russians’ interest in digital assets continued to grow. This, among other things, is indicated by the volume of purchases of bitcoins for rubles. In the fall of 2020, the indicator returned to the levels that were first recorded in 2017 – against the background of the coin reaching price highs.
A graph that reflects the volume of purchases of bitcoin for rubles. Data: LocalBitcoins
In parallel, in Russia, against the background of the pandemic, interest in non-cash payments has grown. Users began to give up physical money due to the risk of contracting coronavirus.
Statistics on the life span of the coronavirus on various surfaces and comparing the indicators with the results of other viruses. Data: BIS study
So, according to a study by the Boston Consulting Group (BCG), from the beginning of October 2020, in the fall of the Russian Federation entered the top 5 countries in terms of the speed of distribution of cashless payments. As a result, the Bank of Russia received several reasons at once to organize the issue of the digital currency of the Russian Federation:
- Russians’ readiness to work with digital payments;
- the need to prepare for the transition of many countries – leaders of the world economy – to digital analogs of fiat;
- experience, thanks to which Russia will be able to painlessly create and commission a new financial instrument.
Perhaps the presence of a number of “trump cards” in the “sleeve” of the financial regulator of the Russian Federation, in the form of the readiness of Russians to work with digital payments and the experience of other countries, will help the country to painlessly switch to the digital ruble.
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