Artem Genkin: Digital currencies raise personal and national sovereignty concerns

On May 22, the Russian Chamber of Commerce and Industry (RCCI) hosted a roundtable, held by the RCCI Council on Financial, Industrial and Investment Policy on Digital Rights: Fashion, Need or Necessity? The event was attended by representatives of the Bank of Russia, public authorities, and the expert community, the Chamber of Commerce and Industry said in a news release.

Photo by Russian Chamber of Commerce and Industry

The participants discussed why businesses and investors need digital financial assets (DFAs), and outlined several related issues such as the need to improve legislation (including laws regulating the taxation of such tokenized instruments), ways to attract investors to digital projects and improve financial literacy of the population, and a number of other aspects.

Dr. Artem Genkin, President of the NPO Center for Protection of Bank Clients and Investors, covered one of the most relevant current issues – the launch of central bank digital currencies (CBDCs) and, in particular, the digital ruble.

The expert cited a number of factors that contribute to the growing popularity of CBDCs – mobile digital payments finally defeating cash and cards, the choice of new monetary policy instruments (such as the negative interest rate policy), stablecoins gaining momentum, large non-financial players planning to create payment systems, the payment market threatened by an oligopoly of large banks and international payment systems, and distributed ledger solutions being at the peak of popularity.

The speaker quoted the view that the use of the national digital currency in foreign trade would help preserve Russia’s monetary sovereignty, and in general, having enough political will to create alternatives to the existing international payment system could undermine the sanctions potential of the US dollar.

The expert described several possible models of cross-border interaction if the digital ruble becomes embedded in the foreign trade system. At the end of his presentation, Dr. Genkin mentioned the risk of sliding into total control and “digital authoritarianism” if the programmable properties of CBDCs are abused, and underlined the importance of ensuring technological neutrality of the choice between CBDCs and non-digital forms of the national currency.

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