Russian parliamentarians warned of the risks associated with the introduction of a digital ruble. Among them are the likely increase in competitive pressure on banks and the new challenges that may arise in the area of ââinformation security.
Financial markets committee sees threats in digital ruble project
Russia’s digital decree, currently under development, carries some risks that lawmakers want the central bank to consider carefully. Implementing the digital ruble could pose a challenge for the country’s financial sector, noted members of the prominent financial markets committee of the State Duma, the lower house of parliament, after deliberations on the project.
The conclusion comes in response to the âMain Monetary Policy Directions to 2024â presented by the Central Bank of Russia (CBR), Forklog, the crypto news agency, reported this week. The document covers the prospects for launching a national digital currency among other aspects of the Moscow government’s monetary policy.
MEPs fear that the new form of Russian currency, the third incarnation of the ruble after cash and bank money, will increase competition in the banking sector. This could hurt the profits of financial institutions and greatly increase the role of the state in the industry.
In addition, the introduction of a digital and programmable fiat brings new kinds of risks – in the area of ââinformation security, for example. The authors of the report advised the Bank of Russia to analyze the threats to macroeconomic stability and the banking sector. They recommend that the regulator prepare response measures upstream, should these risks materialize.
At the same time, the Duma committee expects the digital ruble to ensure fast, easy and secure payments while reducing the cost of payment services. He âpositively assesses the analysis of the introduction of digital currency and believes that it would also be interesting to analyze the impact of the spread of cryptocurrencies in global transactions,â the conclusion reads.
As Russians increasingly choose non-cash payment solutions – these have reached 75% over the past seven years – and with the growing popularity of cryptocurrencies in mind, the CBR and other institutions have taken serious steps to provide Russian citizens with a government-controlled system. digital currency. The authorities plan to amend 13 Russian laws and codes to accommodate the central bank’s digital currency.
In June, the Bank of Russia formed a digital ruble pilot group with the participation of more than a dozen banks and other stakeholders. The authority plans to complete the prototype of the platform in December 2021 and start testing the CBDC in January 2022. Bank manager Elvira Nabiullina recently said the digital ruble will give Russians what they want. need as a state-issued alternative to other forms. of electronic money, including decentralized cryptocurrencies and stablecoins backed by foreign fiat.
Do you think CBDCs like the digital ruble present serious risks to the traditional financial sector? Share your thoughts on the subject in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, nor a recommendation or endorsement of any product, service or business. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, good or service mentioned in this article.