- Ongoing plans to introduce the Digital Ruble to the Russian financial space raises questions.
- Lawmakers are wary of the risks it might pose to financial institutions and the economy.
Russian lawmakers recently expressed their worries concerning the Digital Ruble implementation. According to the financial market committee, it will introduce risks to the Russian financial markets.
As such, it might be a danger to the continuity of banking services because of the undiluted competition. Furthermore, digital assets bring with them several risks of monitoring and security. The committee pleaded with the Russian Central Bank to ponder on the issue further and weigh its options.
The lawmen replied to the issue after a draft presented to the Central Bank by the State Duma concerning the matter. Dubbed the Main Directions Monetary Policies until 2024, the draft focused on the State Duma committee’s expectations. It highlighted the possibilities that may come with the Russian digital asset. It also went into depth concerning Moscow’s fiscal policies on a long-term scale. Additionally, it also brought more clarity to the conclusions it made with regards to the Digital Ruble.
Notably, the country is on the front lines of adopting central bank digital currencies globally. It may stand as the second after China to successfully bring the CBDC vision to light.
The digital asset’s introduction plan
The Bank of Russia is currently working on the Digital Ruble prototype. Its development should end in December 2021, ushering in its long-awaited launch. Afterward, it hopes to initiate pilot programs that will help monitor its usability in the market. Besides, this move is an excellent way to deal with the Digital Ruble’s mass adoption.
The bank expects the digital asset to meet several conditions for its successful launch. Among them is that the coin should not unbalance inflation by increasing it. This factor will ensure that the Russian economy does not suffer more decline.
It should also maintain convenient exchanges between it and other Ruble forms. The bank is working towards an extensive test period of its digital asset in the financial space to make necessary improvements. Therefore, it hopes to take one or more years in the field to ensure its functionality. The bank will be responsible for transaction fees related to the Digital Ruble.
Parliamentarians reluctance in Digital Ruble adoption
The primary concern is the effects the currency will have on financial institutions within the country. The lawmen worry about the profits financial services such as banks amass from their processes. The Digital Ruble will stand as an assured competitor for these services, eliminating extensive bank leveraging.
Nonetheless, this matter is not the only one covered in the complaints presented. They were also concerned about regulatory procedures to regulate the coin, which would fall on the state.
However, Russian citizens prefer digital assets over fiat currencies. In one way, the Digital Ruble might be a positive influence on the country’s economy. People can engage more using the Digital Ruble instead of going for crypto in the market. Also, its mass adoption will eliminate some of the threats that lawmakers present.