Just weeks after mentioning the possibility of an oil-backed cryptocurrency, Russian officials have proposed a stablecoin that would be pegged to the national fiat currency, the ruble.
Ruble Stablecoin Could Be Nigh
The new proposal comes from Anatoly Aksakov, chairman of the committee for the financial markets at the State Duma, the lower chamber of Russian parliament.
“We’ll have a [national] cryptocurrency, but it will be backed by assets,” Aksakov was quoted as saying by the news service Moskva.
“This will be a coin issued by [Russia’s] central bank as it will be based on fiat money, and fiat money will be its backing,” he went on to say. “The [stablecoin’s] exchange rate to the ruble will be one to one.”
According to Aksakov, the use of crypto in the Russian financial system is “promising.”
The fact that the idea comes from Russia’s legislative body means that a final decision on the ruble stablecoin would take much less time than under the normal process, wherein a government agency submits a draft law to the State Duma.
However, the idea will have to be discussed with the Central Bank before any further steps could be made. So far, there has been no comment from the regulator, which has been ambiguous about crypto in recent months.
So far, most stablecoins backed by fiat currencies have generally been pegged to the U.S. dollar, euro, or the Swiss franc. A ruble-pegged coin would be a first.
A Stablecoin for an Unstable Ruble?
One possible issue with a ruble-backed stablecoin is the Russian currency’s volatility. Many still remember the plunge the ruble took four years ago when the United States and the European Union slapped sanctions on Russia for the annexation of the Crimean peninsula from Ukraine.
By late 2014, the ruble lost nearly 50 percent of its value against the U.S. dollar and other major currencies. It has recovered somewhat since then, but losing around 10 percent of its value over short periods of time has not been uncommon as of late. With more sanctions looming, the ruble’s prospects remain uncertain.
Meanwhile, just last month, Igor Yusufov, Russia’s former energy minister and current head of oil and gas investment corporation Energia, proposed an oil-backed cryptocurrency that could be shared with other major oil-exporting countries.
The idea behind it is that the replacement of the U.S. dollar as the main price unit in the global oil market with an oil-backed cryptocurrency would help oil-exporting countries to diversify risks linked to vulnerabilities of their national currencies.
So for, no practical steps towards the introduction of the oil-backed coin have been made.
What’s your take? Is a ruble stablecoin a good or bad idea? Let us know in the comments section below.
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