Russia’s Central Bank to Consider Gold-Backed Cryptocurrencies for Mutual Settlements

Russia’s central bank, the Bank of Russia, will consider issuing a gold-backed cryptocurrency, Russian news agency TASS reports May 23.

Elvira Nabiullina, the head of the Bank of Russia, revealed that the bank may be interested in creating a gold-pegged crypto for conducting mutual settlements with global jurisdictions.

However, Nabiullina claimed that she believes that it is more important to develop international settlements using national currencies. Speaking at a meeting of the State Duma, the bank’s governor cited a successful example of using national currencies in settlements under the framework of the Eurasian Economic Union (EAEU), noting that the development demonstrated good dynamics.

Nabiullina also noted that Russia's central bank has not changed its stance towards the adoption of cryptocurrencies in the Russian monetary system, claiming that the bank is against a scenario wherein cryptos become a substitute to fiat money.

In April 2019, the Bank of Russia released a policy brief on the potential benefits and disadvantages of central bank digital currencies (CBDCs). According to the bank, CBDCs could be a less risky and more liquid type of asset that can potentially reduce transaction costs in the economy. On the other hand, the bank outlined CBDCs’ lack of anonymity as the only one potential disadvantage as compared with cash.

Following the Bank of Russia, an adviser to the President of Russia had previously suggested that launching a CBDC in Crimea could help the region to attract more investors and avoid sanctions.

Recently, Cointelegraph reported that Venezuela and Russia are discussing an opportunity to close mutual trade settlements using Russian ruble (RUB) and the Venezuelan state-owned petro (PTR) cryptocurrency.