Russian Central Bank Pivots on Cryptocurrency Stance, Endorses Crypto-ruble

The Russian Central Bank has recently indicated that it is currently considering launching a national cryptocurrency following First Deputy Prime Minister Igor Shuvalov’s support for introducing a “Crypto-ruble.”

Olga Skorobogatova, deputy chief of the Bank of Russia, has recently made statements at a press conference for the Finopolis Forum of Innovative Financial Technologies in favor of creating a Russian national cryptocurrency. In the announcement, Skorobogatova indicated that “the creation of a national cryptocurrency stimulates the growth of non-cash payments and electronic payments, including, possibly, cross-border payments.”

Skorobogatova’s statements echo her earlier comments at the St. Petersburg International Economic Forum in June this year, in which she remarked that Russia desires to “jointly test blockchain for cooperating with EU countries on the projects we’re going to start this year.”

In her more recent press conference, Skorobogatova commented on the utility of cryptocurrencies in fostering increased use of digital transactions:

“It is becoming more convenient for all users to pay for goods and services through electronic wallets, and the digital currency can play the role of a catalyst for using it for payments in a broader sense.”

Embracing a Crypto Finance Education Strategy

In her address, the deputy chief also referenced the impending crypto financial education program that will be a focus for the bank moving forward, citing a recent case of fake bitcoin sales allegedly sold in Obninsk, southwest of Moscow. The Russian Central Bank’s Head of Consumer Protection Services, Mikhail Mamut, announced at the conference that “The Central Bank will pay more attention to increasing financial literacy in this area in order to minimize basic mistakes.”

The Russian Ministry of Finance has recently approved the incorporation of cryptocurrency into the country’s financial literacy strategy. Minister of Finance Anton Siluanov has stated in a broadcast on TV channel “Russia 24” that it is necessary to include the topic of cryptocurrency to improve the financial literacy of Russians:

“The question of investing in instruments such as cryptocurrencies will, of course, be discussed, and we now see more risks than recommendations on investing in such instruments. So, explaining the possible consequences of investing in unregulated instruments will be one of the issues with which we will speak for the current year and until 2023.”

Russia Opposes Bitcoin

The recent indications that Russia may be introducing a state-backed cryptocurrency are at odds with recent condemnations of other cryptocurrencies such as bitcoin. The Russian Central Bank has previously taken a hardline stance to the use of digital currencies, stating “Concerning the use of cryptocurrency, according to the current legislation, the official currency of the Russian Federation is the ruble. The issue of monetary surrogates in the territory of the Russian Federation is not allowed.”

Given the recent statements made First Deputy Prime Minister Igor Shuvalov in his support of the creation of a state-backed Crypto-Ruble, it’s clear that the Russian government desires promote the integration of blockchain technology into a state-controlled apparatus, rather than oppose it directly. This is further indicated by comments from Russian President Vladimir Putin on October 10:

“We need – based on international experience – to build a regulatory environment that will make it possible to codify relations in this sphere, reliably protect the interests of citizens, businesses, and the state and provide legal guarantees for using innovative financial instruments.”

In the meeting with Russia’s finance minister and central bank governors, Putin stated, “I would like once again to draw your attention to the need to use the advantages that are offered by new technological solutions in the banking sphere. At the same time, it is important not to create unnecessary barriers, of course, but rather to provide essential conditions for advancing and upgrading the national financial system.”