Russia and China plan to cooperate on regulating CBDCs

Russia and China plan to cooperate on regulating CBDCs

Agreement between Russia and China to regulate CBDCs?

Russian Prosecutor General Igor Krasnov has called for the Russian and Chinese central banks to cooperate in regulating central bank digital currencies (CBDCs). This statement comes just days after the State Duma, Russia's parliament, voted in favor of a bill allowing tests for the digital ruble.

The Russian central bank plans to launch a digital ruble pilot project along with 13 domestic commercial banks early next month. Meanwhile, China is already in the late stages of its own digital yuan pilot project. The Central Bank of China (PBoC) is currently testing offline wallets and integrating CBDC wallets with government-issued social security cards.

Russia's Prosecutor General Krasnov emphasized that it is in the common interest of both countries to create a legal system that can prevent possible criminal abuse of CBDCs. He expressed these views during a meeting with his Chinese counterpart Ying Yong.

Krasnow mentioned that China was one of the first countries to introduce CBDC to protect the economy from the criminal influence of cryptocurrencies. The Russian justice system could benefit from an exchange of information on the legal regulation of CBDCs and protection against criminal influence.

Furthermore, Krasnov pointed out that the State Duma has already adopted the CBDC law, which will come into force on August 1st. Some provisions of the law are scheduled to take effect at a later date. The law also allows non-residents of Russia to open wallets at the discretion of the Central Bank. This suggests that Russia wants to use its digital ruble as a tool for international trade from the start.

This stance differs from China's original position, which wanted to develop the digital yuan exclusively for domestic use. However, in recent months the Chinese central bank's attitude has changed somewhat. Officials have started talking about the “cross-border” properties of the digital yuan. Chinese banks have already tested cross-border payments with Hong Kong and Macau.

Olga Skorobogatova, First Deputy Governor of the Central Bank of Russia, recently expressed her positivity about the “fantastic” idea of ​​cross-border CBDCs, saying her bank has discussed it. However, Skorobogatova emphasized that cross-border adoption of CBDCs is unlikely in the near future.

It remains to be seen whether Russia and China will actually enter into close cooperation to regulate CBDCs. Such cooperation could help ensure the security and regulated use of digital currencies worldwide.