Russia explores establishing a stablecoin settlement platform while India prepares to test its CBDC
(Kitco News) - Stablecoins and central bank digital currencies (CBDCs) continue to be hot topics in the world of cryptocurrencies as governments around the world increasingly entertain the idea of integrating digital assets into their financial ecosystems.
On Tuesday, reports emerged that Russia’s Finance Ministry has begun working with governments of “friendly” nations to create a cross-border stablecoin-based payment platform.
According to Deputy Finance Minister Alexey Moiseev, the move is being done in an effort to avoid the use of U.S. dollars and euros. Moiseev implied that part of the reason for creating the new platform was to offer payment options that all parties deem acceptable.
“We offer mutually acceptable tokenized instruments that will be used on these platforms, which are essentially clearing platforms that we are currently developing with countries,” Moiseev said. “Stablecoins can be pegged to some generally recognized instrument, for example, gold, the value of which is clear and appreciable for all parties involved.”
Russia’s increased openness to cryptocurrencies comes as the country has been the target of severe sanctions by the United States and the European Union following its invasion of Ukraine in February. Threats to remove Russian banks from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, messaging system, have added a sense of urgency to the creation of such a platform.
This latest development follows Monday's announcement from the Bank of Russia that it has agreed with the finance ministry to legalize the use of cryptocurrencies for cross-border payments.
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India begins testing its CBDC
Meanwhile, India has now progressed to the next stage of development for its CBDC as the Reserve Bank of India (RBI) has asked four state-run banks to begin testing the digital currency as it prepares for its full launch by the end of 2022.
This comes despite the central bank seeking a ban on crypto trading in the country, highlighting the difference in perception between CBDCs and public cryptocurrencies.
According to a local media report, the RBI has selected the State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda “to run the pilot internally.”
The central bank is also reportedly in discussions with several fintec companies related to the development of the digital rupee, including the U.S.-based Fidelity National Information Services, Inc (FIS).
FIS currently advises several central banks on a variety of CBDC-related issues including offline payments, programmable payments, new monetary policy toolkit, interest-bearing CBDC, fractional banking issues, financial inclusion, and cross-border CBDC payments, according to Julia Demidova, senior director at FIS.
The RBI is currently planning to introduce the digital rupee in stages during the current fiscal year that ends in march.
India’s finance minister Nirmala Sitharaman has previously spoken positively about the prospects of a CBDC and how it can facilitate the settlement of large transactions between countries or institutions.
“There are clear advantages in a central bank driven digital currency because, in this day and age, bulk payments happening between countries, large transactions between institutions and large transactions between central banks themselves of each country are all better enabled with digital currency,” Sitharaman said.