Bank of Russia to Consider Issuing Gold-Backed Crypto

Wilfred Michael 

Wilfred Michael

News reporter

23 May 2019,
15:37
Bank of Russia to Consider Issuing Gold-Backed Crypto

The Bank of Russia will review the possibility of issuing a cryptocurrency that has its value linked to the prices of gold according to Elvira Nabiullina, head of the Central Bank.

Elvira reportedly confirmed the development while speaking to lawmakers in Russian State Duma, revealing in the process that such a cryptocurrency could prove useful for mutual settlements with other countries.

“As for mutual settlements, we will consider, of course, your proposal on what cryptocurrency is tied to gold,” Elvira said before going to suggest that it may still be better to use national currencies as a unit for mutual settlements.

According to the top banking official, efforts to use national currencies as a means of mutual settlements under the Eurasian Economic Union (EAEU) regulatory framework has shown “good dynamics.”

Moving away from the possibility of a gold-backed cryptocurrency, Elvira reiterated the Central Bank’s stance with regards to cryptocurrencies eventually becoming a part of Russia’s monetary system in the near future.

To that respect, local news agency, TASS quotes Elvira as saying,

“We [...] are opposed to cryptocurrencies being launched into our monetary system. We do not see this possibility, that cryptocurrencies, in fact, fulfill here the function of monetary surrogates. In this part, definitely not.”

Aside from Russia’s Central Bank, Stmarket.co also reported earlier this week that the South African Reserve Bank (SARB) is engaging in consultations with industry experts regarding the possible issuance of a bank-backed digital currency.

Yet another central banking authority, the Eastern Carribean Central Bank (ECCB) has already initiated the process of releasing a similar digital currency, saying back in March that the issuance is certainly “not an academic exercise.”

The Bank of Korea, on the other hand, warned against the move because of the potential damages it could do to a nation’s banking system.

 

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