Topic: Will sanctions force Russia to create a CBDC of its own? (Read 256 times)
I'm sure the study and analysis of the bad things from the invasion of Ukraine has been carried out by Russia for a long time, and when they received economic sanctions and the negative impact of the invasion, it made me believe that it would not have a big impact on the Russian economy, especially since they are directly adjacent to China which will always support Russian policy.
Russians has resources that will sustain them all through the sanction but to save their currency devaluation in the foreign exchange market resolving to digital Ruble will wane off any possible effect of the sanction. Currently there are different payment gate way outside the usual messaging platforms although they could be slow and some might refuse to work with Russia because of the sanction so test running a digital coin for Russia is a necessity
This could be an option for them, considering that the sanctions imposed by various parties will of course make it difficult for them to manage their country's finances and again, the current ruble is still frozen in several countries, including the country I live in now.
CBDC can be an option now because they don't want to face inflation at a time like this.
on the other hand now I read some news Gold is still the main thing juxtaposed with the ruble now
CBDC can be an option now because they don't want to face inflation at a time like this.
on the other hand now I read some news Gold is still the main thing juxtaposed with the ruble now
Yes, there's nothing we can do but to wait if they'll also going to make their own CBDC. Now with those sanctions, this has made them to put their own condition for their products.
What a style and instead of going down, they went down temporarily but now they're setting the rules and I think that this is going to make sense until they've finally recovered.
Possibility russia of creating a CBDC will be very large in my opinion for them to fight the existing sanctions, some time ago there were even rumors that if America had banned the use of dollars in every transaction made by Russia and even the chairman of the Russian energy committee had stated that Russia was open. to accept different currencies for all types of exports that they do including using bitcoin, so from this statement they can will create a CBDC to facilitate every transaction with friendly countries.What a style and instead of going down, they went down temporarily but now they're setting the rules and I think that this is going to make sense until they've finally recovered.
But what if Russia decides to create a CBDC backed by Bitcoin itself? The new digital currency can work as a sort of sidechain that would gain all of the security of the main Bitcoin blockchain. If the Russian government takes this route, I doubt sanctions will be able to affect its economy whatsoever. Besides, Russia still has allies supporting it.
Most of the world's countries may have rejected Russia, but there's still a small minority that are willing to support it every step of the way. No one knows what's in Putin's mind right now, so the only thing we can do is hope for the best. Who knows what will be of Russia's economic system in the not-so-distant future? Just my opinion
I do not think that they really need it to be even backed by bitcoin. Just have a situation where you could have a bitcoin reserves, I mean this is a financially huge nation and they could buy billions of dollars worth of bitcoin from the taxes and foreign money they keep getting.Most of the world's countries may have rejected Russia, but there's still a small minority that are willing to support it every step of the way. No one knows what's in Putin's mind right now, so the only thing we can do is hope for the best. Who knows what will be of Russia's economic system in the not-so-distant future? Just my opinion
This means that while we all buy bitcoin, we are making Russia more powerful, each time people buy and increase the price of bitcoin, they make Russia more powerful. This could work very well for them, they could have hundreds of billions of dollars worth bitcoin they wanted to, and it wouldn't even be like impossible for them, not easy to get that much, but not impossible.
They could if they wanted, but there isn't an incentive for anyone to adopt a ruble based CBDC. If they want to create a system that is more immune to sanctions, would seem a whole lot easier just for people to adopt Bitcoin instead. Perhaps I'm being shortsighted - if the ruble is increasingly becoming worthless, digitalizing the currency serves no purpose. It's not as if ruble is a reserve currency. CBDC's just give more central authority to the major banks. Problem with the current sanctions is that their economy and assets are being frozen, a CBDC won't fix any of this.
You do have a point there, mate. But what if Russia decides to create a CBDC backed by Bitcoin itself? The new digital currency can work as a sort of sidechain that would gain all of the security of the main Bitcoin blockchain. If the Russian government takes this route, I doubt sanctions will be able to affect its economy whatsoever. Besides, Russia still has allies supporting it.
Most of the world's countries may have rejected Russia, but there's still a small minority that are willing to support it every step of the way. No one knows what's in Putin's mind right now, so the only thing we can do is hope for the best. Who knows what will be of Russia's economic system in the not-so-distant future? Just my opinion
They can do that but I don't think that they will. Although they've got a new rule that it's going to be Rubles that shall be used to pay for their commodities needed by other countries.
I guess that's already good enough for them not to make their own CBDC. But as they have already been aware about the potential of having their own crypto through CBDC, who knows what's on it for tomorrow.
Let's just wait and see then since we don't know yet what was Putin's been thinking on how to make their country survive from the western sanction. And I think forcing other countries to pay in Rubles instead of USD to sustain their economy. We don't know yet if creating CBDC is in their option but maybe they would choose the latter. Since they were selling commodities in exchange for Rubles I think there's a long term effect about that.I guess that's already good enough for them not to make their own CBDC. But as they have already been aware about the potential of having their own crypto through CBDC, who knows what's on it for tomorrow.
What a style and instead of going down, they went down temporarily but now they're setting the rules and I think that this is going to make sense until they've finally recovered.
There are few things that we can keep in mind while thinking of Russia and them keeping the whole world at bay :
1. They are going to face long term consequences with no help from any other country even the countries like India, they are actually not in their favour they just choose not to speak against them because of their long term relationship thus they are quite cornered at the moment.
2. They are backing rubble up with gold which means the value is rising again and they are also thinking of asking other countries to pay in rubles for the gas which is working to an extent
3. They are cutting down imports and exports now which means they might have to set their economy aside and maintain their own system.
4. EU is extending sanctions on BTC as well meaning they might need another option which would be CBDC'S ofc and at the same time we can see them evolving a bit like China and North Korea if this madness doesn't stop therefore I do think they are definitely going to launch it.
They will definitely isolate their economy and do every possible thing.
1. They are going to face long term consequences with no help from any other country even the countries like India, they are actually not in their favour they just choose not to speak against them because of their long term relationship thus they are quite cornered at the moment.
2. They are backing rubble up with gold which means the value is rising again and they are also thinking of asking other countries to pay in rubles for the gas which is working to an extent
3. They are cutting down imports and exports now which means they might have to set their economy aside and maintain their own system.
4. EU is extending sanctions on BTC as well meaning they might need another option which would be CBDC'S ofc and at the same time we can see them evolving a bit like China and North Korea if this madness doesn't stop therefore I do think they are definitely going to launch it.
They will definitely isolate their economy and do every possible thing.
Everyone wants to assume that Russia would find a way to make crypto a very highly integrated part of their world but everyone forgets that they want to make Ruble strong instead. I get that you want to see crypto, but the reality is that they only use it to bypass sanctions and nothing else.
When you look at the governmental part, we need to make sure that there is absolutely no reason for them to do something like this, they "could", but they won't and that matters a lot. Just focus on the fact that you could even ban bitcoin, and make sure that everyone uses ruble. What they need is not bitcoin, what they need is very strong ruble and they will focus on that.
When you look at the governmental part, we need to make sure that there is absolutely no reason for them to do something like this, they "could", but they won't and that matters a lot. Just focus on the fact that you could even ban bitcoin, and make sure that everyone uses ruble. What they need is not bitcoin, what they need is very strong ruble and they will focus on that.
CBDC is a close possibility, but the reason I don't think is sanctions. I don't know if the two countries will reconcile someday, but if the policy of using the ruble to import gas from Russia is profitable, then the policy could last longer (or forever) and expand to other trades as well.
Currently the Ruble is pegged to gold to maintain its value stability, with a value of 5000 rub = 1 gram of gold
They might consider it but not that necessary, at least for now. Russian ruble actually recovered well since it dropped heavily after starting to invade the whole of Ukraine. Thanks to Russian gas and oil which Putin took advantage by demanding transactions to be paid with ruble.
Currently the Ruble is pegged to gold to maintain its value stability, with a value of 5000 rub = 1 gram of gold
Quote from: https://www.onmanorama.com/news/business/2022/04/08/pegged-to-gold--the-russian-ruble-bounces-back-.html
With Russian gold coming under sanctions, the country's gold stocks -- from banks as well as individuals could be sold to the central bank. The value of the ruble will further increase once the central bank's gold stocks from domestic sources increase, which is expected to happen in the next few months.
They might consider it but not that necessary, at least for now. Russian ruble actually recovered well since it dropped heavily after starting to invade the whole of Ukraine. Thanks to Russian gas and oil which Putin took advantage by demanding transactions to be paid with ruble. Many countries are not keen on the Russian trade embargo too just like economic giants China and India. Even Europe's largest economy which is Germany said it will be free from Russian gas by 2030. I think Europe and even the US are also secretly buying ruble when Russia mentioned it will sell its oil and gas with huge discounts.
I think it is entirely possible that as the sanctions of the West and the US against Russia are increasing, the solutions they are taking in response, such as the doubling of the basic interest rate by the banks and the use of CBDC to bypass the US-led payment system, are also possible given the current circumstances.
I think if you're going to start a war in this era, you'll have to be able to look at least 5 years into the future. Putin isn't stupid. He and his cronies knew this would happen and get worse over time. If they were afraid of the effects of these sanctions, they would have backed down from the get-go and tried a different approach. But they didn't, so they must have prepared for the worst. Also, they already had a taste of other countries' sanctions when they invaded Crimea so this isn't news to them. I wouldn't be surprised if releasing a digital coin has been considered in their plan, but I don't think that's going to happen anytime soon.
With oil prices skyrocketing, Russia is recovering faster than they are losing, which is one of the reasons we see ruble bouncing back. Once this war is over, the true losers of this war are the countries and private multinational companies that participated (or were forced to participate) in the sanction, because they lost a lot but didn't gain anything from it.
As for Russia, they might not be able to take over Ukraine completely, but they will have managed to topple down its government and cripple any plan of the US to put up nukes in their backyard. Russia is now using gold to evade the impact of the sanctions so there are more ways for Russia to survive than there are to murder its economy. They still hold a lot of aces to resort to having a DC. With Binance hopping on the sanction bandwagon, anything digital isn't appealing for those people. If it is and they've already made steps into its creation, it would still be centralized.
With oil prices skyrocketing, Russia is recovering faster than they are losing, which is one of the reasons we see ruble bouncing back. Once this war is over, the true losers of this war are the countries and private multinational companies that participated (or were forced to participate) in the sanction, because they lost a lot but didn't gain anything from it.
As for Russia, they might not be able to take over Ukraine completely, but they will have managed to topple down its government and cripple any plan of the US to put up nukes in their backyard. Russia is now using gold to evade the impact of the sanctions so there are more ways for Russia to survive than there are to murder its economy. They still hold a lot of aces to resort to having a DC. With Binance hopping on the sanction bandwagon, anything digital isn't appealing for those people. If it is and they've already made steps into its creation, it would still be centralized.
I think that Russia will abandon its plans to create a digital ruble (CBDC).
CBDC is a very controversial experiment, even in a situation far from a crisis. Launching such an innovative project in the current situation is simply irrational. It is impossible to calculate all the social and financial consequences of this decision.
China is very clear about why it is creating a digital yuan. The digital Chinese yuan is part of a digital ecosystem that allows you to control social, economic and financial processes. The digital yuan makes no sense without the total computerization of society, without the development of isometry, a social rating system, five-year plans for industrial development, and expansion into Africa and Central Asia.
Russia now has much more modest goals. Russia is not in a position to set itself ambitious goals.
The main goals of modern Russia are slowing down the process of technical and cultural degradation, maintaining a functioning infrastructure and preventing the collapse of the country.
CBDC is a very controversial experiment, even in a situation far from a crisis. Launching such an innovative project in the current situation is simply irrational. It is impossible to calculate all the social and financial consequences of this decision.
China is very clear about why it is creating a digital yuan. The digital Chinese yuan is part of a digital ecosystem that allows you to control social, economic and financial processes. The digital yuan makes no sense without the total computerization of society, without the development of isometry, a social rating system, five-year plans for industrial development, and expansion into Africa and Central Asia.
Russia now has much more modest goals. Russia is not in a position to set itself ambitious goals.
The main goals of modern Russia are slowing down the process of technical and cultural degradation, maintaining a functioning infrastructure and preventing the collapse of the country.
Ever since the US and its allies imposed economic sanctions on Russia, the country's been going downhill at a fast pace. Putin will have no choice but to look for other ways to help sustain the economy. He can either seek the help of China, back the Ruble with the value of a Bitcoin, or simply order Russia's Central Bank to create the new "digital Ruble". I think Putin will take the latter option in order to become impervious from sanctions in the long term. A digital Ruble living on its own blockchain network would be truly unstoppable. If other countries wanted to bring down Russia's economy, they would need to shut down the entire Internet to become successful (something that's largely impossible). Imagine if the new digital Ruble is launched as a sidechain to the main Bitcoin blockchain. It'll be as secure and censorship-resistant as Bitcoin is, greatly undermining the US Dollar's influence in the mainstream world.
Do you think economic sanctions will force Russia to create a CBDC of its own? If not, why? How do you think Russia's economy will fare in the next 5-10 years? Your input will be greatly appreciated. Thank you.
The prototype of the digital ruble platform was created in December 2021, and on February 15, 2022, testing began.Do you think economic sanctions will force Russia to create a CBDC of its own? If not, why? How do you think Russia's economy will fare in the next 5-10 years? Your input will be greatly appreciated. Thank you.
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Now three banks from the pilot group have already connected to the platform. Two of them successfully completed a full cycle of digital ruble transfers between clients using banking mobile applications. Clients not only opened digital wallets on the digital ruble platform through a mobile application, but also exchanged non-cash rubles from their accounts for digital ones and then transferred digital rubles between themselves. The remaining participants in the pilot group plan to join the testing of the digital ruble platform as they complete their IT systems.
They can do that but I don't think that they will. Although they've got a new rule that it's going to be Rubles that shall be used to pay for their commodities needed by other countries.
I guess that's already good enough for them not to make their own CBDC. But as they have already been aware about the potential of having their own crypto through CBDC, who knows what's on it for tomorrow.
Let's just wait and see then since we don't know yet what was Putin's been thinking on how to make their country survive from the western sanction. And I think forcing other countries to pay in Rubles instead of USD to sustain their economy. We don't know yet if creating CBDC is in their option but maybe they would choose the latter. Since they were selling commodities in exchange for Rubles I think there's a long term effect about that. I guess that's already good enough for them not to make their own CBDC. But as they have already been aware about the potential of having their own crypto through CBDC, who knows what's on it for tomorrow.
The Russia was the huge needed natio to many of countries by their Gas.Russia had the abundant source of Gas.They are tied with the natural resources of Gas.No other country had that much gas to replace the position of Russia.In a short period,may some country can supply of the Gas.While consider of a decade,it’s not possible for other country to act like that.
Recovery of the economy won't happen all of the sudden through the backing of ruble by CBDC. Recently ruble saw good bounce from the price it fell during the rumours on ban of Russian Oil and gas into US. The economy of Russia is completely dependent on natural oil and gas industry. Already USA have stopped importing natural oil and gas from Russia. End of the year European nations were to stop it's import. But this isn't gonna happen, and if it happens then surely Russia will experience a big economic blow of atleast 20% In my view the economic recovery should happen out of the oil industry and Putin have alternate plans than just increasing the interest rates which will help sustain the economy for short term.
How can CBDC help Russian economy if they don't produce things? Look at this chart of Russian imports - almost all of it is just raw materials. Fossil fuels, metals, chemicals, agriculture. High technology products are just a tiny part of it. If their Western buyers will just switch to alternative sources, which is possible because there's lots of developing countries who sell their resources, Russia will have much less money. And if Western powers refuse to sell their high-tech products to Russia, Russian economy and standard of living will plunge even further.
Financial networks are just tools. Being able to send and receive money doesn't automatically mean that your economy will do great. And this is even ignoring the fact that sanctions are hard to bypass on practice, because very few companies want to risk it.
Financial networks are just tools. Being able to send and receive money doesn't automatically mean that your economy will do great. And this is even ignoring the fact that sanctions are hard to bypass on practice, because very few companies want to risk it.
How do you think Russia's economy will fare in the next 5-10 years?
Russia seeks to become larger, wealthier and more powerful. While opposition forces seek to keep russia poor and contained.
Over the next 5-10 years, both sides will maneuver and make adjustments to gain an advantage. Whichever side does a better job of it will emerge victorious.
In a traditional war, russia would dominate the land war, while SWIFT bans and economic sanctions would dominate the economic war.
But it appears we're living in a new era now. Russian tanks aren't the dominant force they were 50 years ago. Drones, IEDs, laser guided artillery and other new developments are changing war significantly.
SWIFT and economic sanctions aren't the dominant power they were 50 years ago either. Digital currencies and crypto have also shifted the worlds of finance and economics.
Whoever is willing to change and adapt quicker could gain the upper hand here IMO. Conventional wisdom is becoming outdated and obsolete at a faster rate in contrast to previous eras of history.
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