Here come the Russians!
Here is our pick of the 3 most important Stablecoin news stories during the week.
Russia’s bill to regulate cryptocurrencies has been signed into law by President Vladimir Putin. The new law gives legal status to cryptocurrency but prohibits its use as a means of payment.
The law provides a definition to digital currency, stating that it “is recognized as an aggregate of electronic data capable of being accepted as the payment means, not being the monetary unit of the Russian Federation or a foreign state, and as investments,” Russian news agency TASS described. “The digital currency cannot be used at the same time to pay for any goods and services.”
Meanwhile, the law sets forth that digital financial assets “are digital rights comprising money claims, ability to exercise rights under negotiable securities, rights to participate in equity of a non-public stock company and right to claim transfer of negotiable securities set in a resolution on the DFA issue,” TASS noted. These assets can be sold, purchased, exchanged, and pledged. However, they cannot be used as a means of payment.
Russian banks and exchanges can become exchange operators of digital financial assets provided that they register with the central bank, the Bank of Russia.
Almost the very next day up pops SberBank, the largest and state owned retail Bank in Russia, with advanced plans to use Hyperledger for it’s very own stablecoin.
Meanwhile, China’s big four state-owned commercial banks have started large-scale internal testing of what would be the world’s first sovereign digital currency, as the launch of the digital yuan appeared to move a step closer, the 21st Century Business Herald reported on Thursday.
The Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China and the Agricultural Bank of China are working on the digital yuan with the central bank in major cities, including Shenzhen, according to the Guangzhou-based newspaper.
Users taking part in the trial can use the app to top up their accounts, withdraw money, make payments and transfer money after registering with their mobile phone number. The banks are also testing a scenario where a user can make a transfer to another account without an internet connection, the newspaper added.
Another interesting angle on the Chinese CBDC from the FT, they speculate that in the past, the People’s Bank of China (PBOC or Central Bank) gave the local Tech giants an easy ride in the payments space and is now looking to balance things going forward.
So what we are seeing is that these two very centralised State actors are looking at CBDC’s as an opportunity for the Central Banks to give the State Banks a major leg up. Will the west follow or go a very different way?
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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