Idea of Using Digital Ruble as Reserve Currency Circulating in Sanctioned Russia CryptoGlobe
A call to make the digital ruble a reserve currency has been made in the State Duma, the lower house of the Russian parliament. Meanwhile, concerns have been raised in the West that the new incarnation of Russian fiat could be used to evade the sanctions that have isolated the country.
Digital ruble will serve as reserve currency, lawmaker suggests
In the face of growing Western sanctions, officials in Moscow have been considering ways to circumvent restrictions that have already limited Russia’s access to its foreign exchange reserves and the global financial market.
Sergei Mironov, who leads the “A Fair Russia” opposition faction in the State Duma, has urged the federal government, central bank and operational headquarters to counter sanctions to introduce the digital rouble, Russian media and Forklog reported.
The senior parliamentarian reportedly said that the aim of the initiative is to issue the central bank’s digital currency (CBDC) for specific purposes such as the financing of housing and other construction projects, as well as the development of production and transport infrastructure.
“The digital ruble should become a full-fledged investment and reserve currency for Russia,” Mironov explained. The MP believes that the CBDC will provide the Russian economy with the necessary financing without stimulating inflation. Digital rubles cannot be deposited abroad or used for unintended purposes, he added.
Western allies fear Russia is using cryptocurrencies, including the digital version of the rouble, to evade sanctions imposed for its invasion of Ukraine and have moved to close loopholes. Recent statements by another lawmaker and member of the Crypto Regulation Task Force, Alexander Yakubovsky, indicated that Russia wants to use digital currencies to restore its access to global finance.
The Central Bank of Russia (CBR), a staunch opponent of the legalization of cryptocurrencies, is actively developing the digital ruble project. The monetary authority began considering a CBDC three years ago. A consultation document was published in October 2020 and in April 2021 the bank published a digital ruble concept outlining its core architecture.
Testing of the digital ruble platform began this year with the CBR announcing the first full transactions between individual wallets in mid-February. A dozen Russian banks will participate in the trials which are expected to continue throughout 2022. The Bank of Russia insists that its digital currency will create new opportunities for Russian citizens, businesses and the state.
The Russian Federation has also tried to limit its dependence on the US dollar. Last October, the Foreign Ministry hinted that it was possible to partially replace the greenback in Russia’s currency reserves and trade settlements with other currencies and even digital assets in the future.
Do you think Russia will be able to use the digital ruble as a reserve currency and evade sanctions? Share your thoughts on the subject in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Warning: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. 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 alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.