Russia’s Central Bank Is Testing CBDC Along With A Stablecoin Linked to Real Estate

Government and financial institutions across the globe have accelerated their work on having a national digital currency. While the U.S. and China are both working on a digital equivalent of their national currencies, Russia is working on its own plans.

The central bank of Russia- Bank of Russia - has recently started testing stablecoins linked to the country’s real estate. This experiment is currently performed under Russia regulatory sandbox program.

The sandbox program usually allows local companies to test different products and services within a limited environment. The Sandbox program is overseen by the regulator without any risk of breaking the financial laws.

This news was revealed by Bank of Russia chairperson Elvira Nabiullina during her interview with local news outlet Interfax. She said that the central bank is currently studying the nature of digital currencies whether they can become “money surrogate” or function as a mode of payment.

Nabiullina said: “We test stablecoins in our regulatory ‘sandbox.’ Companies that want to issue tokens secured by some real assets. We in the ‘sandbox’ look at how they can work, but we do not assume that they will function as a means of payment and become money surrogate”.

Additionally, the chairperson also confirmed that the Russian Central Bank is working simultaneously on the option of having a central bank digital currency.

“Now such an opportunity is being actively discussed by many countries, we are also at the stage of studying this topic. First of all, we need to understand what will be the advantages for our citizens, for business, for example, compared with the option when we develop fast payment systems, expand them application not only for settlements between individuals, but also between legal entities,” she said.

The chairperson further explained that CBDC project comes with its own set of challenges and the central bank needs to thoroughly check how the inclusion of CBDC can affect the stability of the financial system.

The chairperson said: “If, for example, individuals are allowed to keep money in accounts with the Central Bank, this could significantly change the passive base of commercial banks. In some not very calm times, the flight of deposits and overflow of funds may begin”.