Digital financial asset on gold could be useful in international settlements - Russian central banker

YEKATERINBURG. Feb 20 (Interfax) - The issue of digital financial assets (DFA) for which the underlying asset is gold could help participants in foreign economic activities carry out settlements, the first deputy governor of the Central Bank of Russia (CBR), Vladimir Chistyukhin said on Friday.

"The legislative foundation for digital financial assets has already been created and when we talk about a gold token today we primarily mean that if such issues happen, they will happen based on the issue of digital financial assets, meaning tokens will be issued within the framework of legislation on digital financial assets. And we really hope that a gold token will help us not only in the context of creating an additional investment product, but perhaps it will also be in-demand in international settlements," Chistyukhin told reporters on the sidelines of the Ural Cybersecurity in Finance forum.

The subject of issuing gold tokens was discussing earlier within the context of modifying the law on the digital ruble. In May 2019, during a joint meeting of committees in the State Duma attended by Central Bank chief Elvira Nabiullina, MP Vladimir Gutenev proposed that the CBR initiate a discussion among BRICS countries about a project to issue national cryptocurrencies denominated in gold.

"Gold is the least vulnerable asset. We could probably find understanding in China and in India and in Brazil," Gutenev said. "But this is perhaps more like so-called stablecoins than cryptocurrencies," Financial Market Committee Chairman Anatoly Aksakov responded at the meeting. "We're studying stablecoins. If this is like a stablecoin, where there is a real asset as security, meaning more like a stablecoin, then this can be considered," Nabiullina said.

The research institute of Russian state development corporation VEB.RF issued a report last summer that considered the state and prospects of the system of payments in international settlements. One of the proposals made in the report was, in light of sanctions, to issue a stablecoin dubbed "gold ruble" that would be backed by gold.

Under this proposal, the government would issue a digital currency backed by gold from Russia's reserves, a "gold ruble," and then set up an exchange on which currencies would be exchanged for "gold rubles." Buyers would acquire "gold rubles" on the exchange and pay for the goods they are purchasing, and then the seller would deliver the goods and exchange the "gold rubles" for the currency they require.