Moscow Says Russia and China Must Cooperate on CBDC Regulation

Two hands, one decorated in the colors of the Chinese flag and the other in the colors of the Russian flag, move together as if to shake hands against the backdrop of both countries’ flags. — Source: Omurali Toychiev/Adobe

The Russian and Chinese Central Bank must cooperate on CBDC regulation, the Russian Prosecutor-General has claimed.

The comments come just days after the State Duma voted in favor of a bill that will allow the Moscow-based bank to begin “real-world” testing on its digital ruble.

The Russian Central Bank wants to begin its pilot in conjunction with 13 domestic commercial banks early next month.

Beijing, meanwhile, is in the later stages of its own digital yuan pilot.

The central People’s Bank of China (PBoC) is now testing offline wallets and CBDC wallets that integrate with state-issued social security cards.

Tass quoted the Russian Prosecutor-General Igor Krasnov as stating that it would be in the “common interest” of both Moscow and Beijing to create a legal system that could prevent criminals from abusing their CBDCs.

Krasnov made the comments during a meeting in Beijing with his counterpart Ying Yong, the Prosecutor-General of the Chinese Supreme People’s Prosecutor’s Office.

Krasnov said:

“China was one of the first nations in the world to introduce a CBDC [partly] in order to protect the economy from the criminal influence of cryptocurrencies.”

The Russian prosecution chief added:

“I believe that the exchange of information about [our digital currencies], legal regulation, and the protection [of the CBDCs] from criminal influence would be of common interest to our prosecutorial services.”

A taxi passes by a road outside the headquarters of the central People’s Bank of China in Beijing. — *The headquarters of the central People’s Bank of China in Beijing.* (Source: Yongxinge [CC BY-SA 3.0])

Russia-China to Cooperate on CBDC Regulation?

Krasnov also made note of the fact that the State Duma had approved the CBDC law, with most of its provisions coming into force on August 1.

A number of its clauses will come into force “at a later date.”

The law also includes provisions that allow “non-residents” of Russia to open wallets at the Central Bank’s discretion.

This would appear to suggest that Moscow is looking to use its digital ruble as a tool of international trade right from the outset.

That would differ from Beijing’s original stance on the matter.

The PBoC originally claimed that the digital yuan was being developed exclusively for domestic use.

But in recent months, the PBoC has changed its tune somewhat.

Officials have begun talking up the “cross-border” credentials of the digital yuan.

Mainland China-based banks have initially been piloting cross-border payments with Hong Kong and Macau, both of which have their own currencies and financial systems.

Russia’s Central Bank First Deputy Governor Olga Skorobogatova recently called the “idea” of cross-border CBDCs “fantastic” and said her bank had “discussed [the matter] a lot.”

But Skorobogatova tempered her comments with a warning that a cross-border CBDC launch was unlikely “in the near future.”