The expert explained the importance of national digital currencies

MOSCOW, May 25 – PRIME. National digital currencies will open up new methods of managing monetary policy, states and central banks are increasingly becoming market players in the financial market, says Viktor Dostov, chairman of the Association of Electronic Money and Money Transfer Market Participants (AED).

“The most noisy topic of 2021 is the digital currencies of central banks. We see a history that states, central banks are becoming more and more market players. And we have understandable expectations that if this process goes ahead, we will come to a fundamentally new banking system” , — Dostov said during his speech at the two-day PLUS-forum “Banks and retail: Digital transformation and interaction”, which opened on Wednesday, May 25 in Tashkent.

The expert believes that this process opens “fundamentally new methods of managing monetary policy.” “This will be direct management of monetary policy, that is, the central bank will no longer sell money to banks, but will manage them directly. If for some reason you need to disperse inflation in the country, you can put a negative rate on your money. If necessary, on the contrary, smooth, you do not set the discount rate of the bank, you directly assign a percentage to your issued funds,” Dostov believes.

He noted that in different countries they speak differently about the goals of introducing digital currencies by central banks. In particular, in African countries it is a tool to achieve financial inclusion, in China it is an opportunity to connect with the foreign diaspora and the state competes with powerful market players like AliPay, in Venezuela and Iran it is as a counter to Western sanctions.

“For example, we in Russia are discussing the story of the so-called “colored” money. This is a simple model, when a child benefit is issued in digital money, then you color this money in a special color,” Dostov said. According to him, parents can no longer spend that kind of money on buying cigarettes or smartphones. “That is, instead of macromanaging monetary and social policy, you are starting to manage it pointwise,” the expert added.

The head of the Central Bank of the Russian Federation, Elvira Nabiullina, said at the end of April that the digital ruble project is one of the priorities and is already being tested with banks. In 2023, the regulator will start piloting digital ruble settlements in the real economy and expects to use it in international settlements, she noted.