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Russian Central Bank Says CBDC Will Wipe Out Need for Crypto

Russian Central Bank Says CBDC Will Wipe Out Need for Crypto 101
Source: Adobe/Valerie Potapova

The Russian Central Bank has been banging the drum again on what has become its favorite subject – regulating crypto, and has apparently responded to criticism of its plans to issue a digital ruble by claiming a central bank-issued token could eliminate out the need for people to use crypto.

In an op-ed piece for Plusworld, Alexei Guznov, the head of the Central Bank (CB)’s Legal Department, stated that the central bank digital currency (CBDC) that the CB hopes to pilot next year can function as a “response to the challenges being shaped by [cryptoassets].”

The CB is by far and away the most vocal opponent of crypto in the Russian governmental system, and has repeatedly come out in favor of issuing nationwide bans or enacting a China-style crypto crackdown.

However, after stating that it had no interest in issuing a digital fiat a year ago, the CB has since pulled off a u-turn, joining many advanced and developing economies the world over in the race to issue a token.

Despite the sea change, the CB is refusing to budge on its anti-crypto stance.

Although Guznov conceded that “crypto is a definite challenge for national payment systems and for the stability of national financial systems in general” due in part to their speed and adoption rate, he opined,

“There is undoubtedly a problem with [cryptoassets] being used part of a system that comprises money laundering, drug trafficking and the financing of terrorism.”

(However, as reported in September, documents uncovered by an investigation conducted by 110 news organizations appear to show global banking giants moving trillions of dollars for clients allegedly involved in fraud, embezzlement, money laundering, and more.)

This led him to a refrain that will be all-too-familiar for Russian crypto advocates.

Guznov wrote,

“Therefore, we believe that [cryptoasset] circulation should be strictly regulated – either in the form of a ban on the circulation of [cryptoassets], or in the form of restrictions.”

And rather than help crypto’s cause, Guzov believes that CBDCs – in Russia and abroad – will effectively wipe out the need for bitcoin (BTC) and altcoins. He stated that CBDCs could be a “worth alternative” to crypto, and concluded,

“We see that countries are now experimenting with projects to create national digital currencies. These can certainly be a clear alternative.”

However, as many crypto advocates have already stressed, a CBDC would help governments to increase their control over finances of its citizens, in contrast to decentralized cryptocurrencies such as BTC.
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