testing of stablecoins
It has come to the notice of everyone that The Bank of Russia recently initiated the testing of stablecoins pegged to real estate. This comes under their regulatory sandbox program. A sandbox considered to be a testing environment that cloisters untested code changes from the production environment or repository.
Elvira Nabiullina, the chairperson of Central Bank, revealed the prospect while speaking up about the topic with the local news outlet Interfax.
Under the sandbox program, the companies are free to test their products and services in a limited or restricted environment. While testing, the companies are tension free as they do not risking or violate the existing financial laws due to the reason that the regulator oversees it.
Nabiullina carried on her explanation and said that at the moment, the bank was still carefully studying the nature and working of these digital currencies and if they are capable of becoming money surrogate and can use as a mode of payment in the coming future.
The chairperson further, also confirmed that the Russian central bank was also exploring various options regarding the topic of introducing a central bank digital currency.
She put forward her point, telling that such an opportunity has actively discussed in many countries, and they are also at the stage of studying this topic. Firstly, she pointed out the need to understand the advantages of not just the citizens and for their own business. She made this point more transparent by giving an example. She said, when we compare it with the option wherein we develop fast payment systems, we expand the application not merely for the settlement between individuals but also between two or more legal entities.
She further pointed out the challenges or obstacles of these types of initiatives led by Central banks on the stability of the financial system.
Here, Nabiullina also added an example to clarify her perspective better. She said that if individuals were allowed to keep money in accounts with the Central Bank, it could significantly change the passive bade of commercial banks. Further in anxious times, the flight of deposits and overflow of funds may begin.
On the other hand, the Central Bank of South Korea cleared all the rumours as it came out and explained that they had no plans of introducing digital currency in their country.