Trust in state-backed digital currencies will be “immeasurably higher” than trust in private cryptocurrencies like Bitcoin (BTC), Russian former prime minister Dmitry Medvedev argued.
Medvedev, the incumbent deputy chief of Russia’s Security Council, spoke of cryptocurrencies and central bank digital currencies, or CBDCs, at the Saint Petersburg International Legal Forum on Tuesday, local news agency TASS reports.
The official pointed out the crucial role of digital transparency associated with emerging financial technologies like private cryptocurrencies. “It’s time to recognize their importance,” Medvedev noted, also stressing the role of new digital forms of money like central bank digital currencies.
“It is essentially a new form of money and their trust will be immeasurably higher than trust in cryptocurrencies,” Medvedev declared. The official also emphasized that the development of state digital currencies should involve input from all the stakeholders in the financial market:
“We must not allow global standards of conduct […] to become an instrument of international economic totalitarianism. All actors, state and non-system must be involved in the development of these approaches.”
The news comes shortly after the Bank of Russia’s first deputy governor Olga Skorobogatova confirming the central bank’s plans to complete a digital ruble prototype by the end of 2021. Earlier this year, Bank of Russia deputy governor Alexey Zabotkin announced that Russia was expecting to start pilots for its CBDC in 2022 after initially introducing digital ruble plans in late 2020.
While Medvedev is confident that CBDCs like a digital ruble would be associated with more trust than crypto, some major crypto players think otherwise. Changpeng Zhao, CEO of the world’s largest cryptocurrency exchange Binance, believes that CBDCs would be less attractive for the crypto community due to limited freedom of use and uncapped supply.
The third President of Russian Federation, Medvedev has been paying close attention to the cryptocurrency industry in recent years. Following a major bear market of 2018, Medvedev claimed that a massive crypto crash was “not a reason to bury” cryptocurrencies. The official also suggested that the government should not prioritize cryptocurrency regulation due to “decreasing” cryptocurrency popularity in May 2019.