COVID-19, Cryptocurrency, News & Updates

COVID-19 Fuels the Race for Digital Currencies

The Bank of Russia explores the possibility of developing its digital currency for a while, and now the central bank has offered up more signs of continued interest.

The bank wrote in a release that its Bank Governors’ Club met virtually to discuss the coronavirus pandemic’s effects on the global economy and what it is described as renewed interest from regulating bodies in the digital currency.

The release says: “While arranging the emission of a digital currency, a central bank should, first of all, assess the impact it will have on monetary policy and financial stability, then develop a procedure to avoid and mitigate cyber risks.” It also claims that representatives from the IMF and the World Economic Forum have attended the meeting.

It continues to reference renewed regulator interest in CBDCs, which it attributes to the pandemic’s boosting growth in crypto and e-commerce. CBDCs are distinct from cryptocurrencies because they are not decentralized but controlled by central banks.

Last January, it has been reported that 80% of the world’s central banks were actively developing or researching their digital currencies. But only 10% had developed pilot projects.

In October, the Russian Central Bank stated that its CBDC could be available next year.

Russia has been skeptical about cryptocurrencies like Bitcoin in recent years; the government now recognizes them legally but stated that traders aren’t allowed to buy and sell anything with them.

The restrictions can theoretically drive the Russian citizens to the CBDC and away from the digital currencies that government can’t overlook.

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