Russia's central bank-backed national cryptocurrency still a possibility; not in the near-term

Russia central bank head calls upon CBDC’s researchers to dig deeper into DLTs.
Bank of Russia report said that CBDCs are less risky and would reduce transaction costs.

The governor of Russia’s central bank is still toying with the idea of launching a central bank-backed cryptocurrency referred to the central bank digital currency (CBDC). However, according to a report published by TASS, a local news agency CBDC is not going to launch any time soon.

The CBDC will be developed and issued by the central bank and will have the status of a legal tender, a feature that cryptocurrencies miss in the country. The head of the central bank in Russia Elvira Nabiullina was speaking at a student conference the city of Skolkovo noting that CBDC is possible but not an immediate project.

Nabiullina emphasized that the robustness of the distributed ledger technology which will be the main technology behind CBDC.

"If we are talking about a national currency that works as a whole in the country — that is, not about private assets — of course, this requires the technology to provide reliability and continuity. Technologies must be mature, including distributed ledger technologies."

While commenting on a question of whether Russia is ready to go virtual and become more cash-free, she said:

“It’s not so much because people want to perform some dubious operations. People often value their privacy, anonymity. Of course, the spread of non-anonymous digital currencies indicate in some sense society’s readiness."

In a report reased in April, the Bank of Russia said the CBDCs could be less risky in comparison to other cryptocurrencies and could help bring down transaction costs. However, the report said that their anonymity feature is still a disadvantage in comparison to cash.

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