A financial expert has hit out at the Russian Central Bank’s digital ruble project, hinting that it amounts to a plan to control the entire financial system – and claiming that if this is the case, it will fail both on the domestic and the international stages.
Speaking to Regnum, Konstantin Ordov, a professor of financial management at the Plekhanov Russian University of Economics, stated that to create a digital ruble “in order to form a new instrument of control” would “discredit the very notion of digital transformation” – the Central Bank ostensible goal.
“If the principal and only advantage of a digital ruble would be that, at any given time it will be possible to know everything about all financial transactions, the interest this digital innovation will vanish even within Russia, not to mention its chances of becoming a global currency.”
The Central Bank, like many other central banks in leading economies, is now motoring ahead with central bank digital currency (CBDC)-related progress, and is hopeful of launching a pilot platform this year, following up with “real-world” transaction testing in 2022.
But experts have been very vocal with their opposition to the move, particularly if the Central Bank pursues a centralized approach to its token. Earlier this year, another academic in the country warned that the digital ruble would create a “centralized database” of Russian citizens’ spending behavior.
Ordov did not completely write off the Central Bank’s plan, however, claiming that the CBDC did have “huge economic potential for Russia” if the bank played its cards right.
He claimed that the bank could learn from cryptoassets and explore the possibility of enabling instantaneous payments with zero or minimal commission fees, as well as smart contract technology, which has the power to ensure the integrity of contracts and guarantee payments.
But to do so, the digital ruble would “not be able to survive and usher in potential benefits all on its own,” the professor claimed.
Instead, Ordov said, the token should seek to “become an integral part of the digital economy,” by fully integrating with the worlds of blockchain technology, cloud-based tech and smart contracts.
Doing so, he said, would mean cutting off support to “an inefficient banking sector and a bloated bureaucratic apparatus that monitors and regulates what can be done algorithmically, and doing so without corruption and conflicts of interest.”
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