Problems and prospects for the development of the digital ruble in Russia
The digital ruble issued by the Central Bank of the Russian Federation can replace other forms of money. Especially non-cash. This is what Viktor Dostov, Chairman of the Russian Association for Electronic Money and Money Transfers, thinks
Russia is in the TOP 5 world leaders in terms of the pace of transition to non-cash payments. Active digitalization is an actual and positive trend. Given that cryptocurrencies play an important role in this, the country is preparing a legislative framework to determine the place of cryptocurrency in the modern financial world.
The Bank of Russia does not plan to recognize cryptocurrency as a value at the level of civil law, but considers it as property in the context of some laws. For example, in the fight against money laundering and corruption.
Why does the country need a digital ruble?
With the help of the national cryptocurrency, it will be possible to reduce risks and make transfers in the field of cryptocurrencies more transparent. The cost of the transaction will be reduced and the availability of use will be increased.
The sphere of digital payments is already well developed in Russia. Instant transfers, contactless payments, QR codes, convenient gadget application interfaces make it more popular every day.
The digital ruble, unlike other cryptocurrencies, cannot be considered decentralized. It will correspond to the interests of monetary regulators and the tax system, i.e. will become centralized.
The Russian banking system will be the sole owner of the database of all users. Thus, the emerging digital ruble tramples on one of the main tenets of cryptocurrencies - their anonymity.
The Central Bank of Russia is considering three options for the technical implementation of the process:
- decentralized distributed ledgers;
- centralized database;
- hybrid option.
The first and third options provide a high level of transaction security, but have low performance and do not allow the implementation of generally accepted reporting standards.
The second option, with the creation of a centralized ledger, benefits from the ability to support high loads, but is very vulnerable and 100% centralized.
Models and use of the national digital currency
The central bank can introduce a national digital currency as follows:
- In the form of electronic wallets in financial institutions for interbank settlements. At the same time, individuals and legal entities will not have access to them.
- The wallets are controlled by the central bank, and this is a direct route to an outflow of liquidity.
- Banking and financial institutions can become intermediaries, helping individuals and legal entities to open e-wallets in convenient conditions, on familiar platforms and applications.
What path Russia will choose is not yet clear. But there is already an understanding of how the digital ruble will work. For example, with its help they will establish control over social payments.
Subsidies for families with children are difficult to control. Crypto Ruble will solve this problem. Digital money can only be paid for children's products and in children's stores. This will be an excellent solution to misappropriation.
Also, digital payments will be used for international transfers. This will make mutual settlements between banks of a number of states more convenient and faster.
Given the future of digital currencies, they are likely to replace traditional cashless payments. This worries commercial financial structures, as it will deprive them of commissions. Therefore, the Central Bank of Russia is actively consulting with the financial community on the aspects of introducing the digital ruble.
The main task that regulators set for the digital ruble is to eradicate the shadow economy. But on the way to this, the cryptocurrency loses a number of unique qualities and becomes another instrument of financial control by regulators and the traditional banking system.
We believe that Russia will be able to find a way to develop national digital money so that all participants in this financial system get advantages!