The Eurasian Economic Union To Launch Digital Currency in 2020
NewsBit News Today2 min read
Creating a digital currency within the Eurasian Economic Union (EAEU) is an inevitability spurred on by the increasing U.S. sanctions against Russia, according to the country's deputy finance minister. Alexei Moiseyev disclosed that the Finance Ministry is exploring the potential of a digital currency supported by the EAEU countries for launch by 2020 or 2021.
The Eurasian Economic Union To Launch Digital Currency in 2020
Founded in 2014, the Eurasian Union consists of five member states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
Moiseyev explained that creating an EAEU currency is “inevitable” because of the growing number of sanctioned businesses. Moiseyev told Izvestia that the Russian Finance Ministry backed an initiative originally proposed by the National Payment Council. Obayeva stated that several major Russian corporations and banks have shown interest in establishing a unified payment mechanism.
Key Details of the EAEU Coin
According to Obayeva, the new payment instrument will consist of mutual obligations between EAEU nations concerning goods supplies. Its exchange depends on the mutual exchange rates of each country's currency alongside their contribution to the Union's overall trade.
The concept of a shared digital currency is also supported by unnamed major trading partners outside the union.
Moiseyev stated that the proposed digital currency project will most likely not rely on blockchain technology. The coin will be modeled after the European Currency Unit (ECU), which the European community used before their conversion to euro in 1999.
Previous Payment System Discussions
Russia's central bank is actively considering the possibility of introducing a supranational cryptocurrency. On December 28, Bank of Russia First Deputy Chairwoman Olga Skorobogatova announced that the potential launch of a digital currency across the EAEU and BRICS nations would likely be examined during 2018. Skorobogatova told news agency Tass that the central bank was in active discussions and evaluating several quality technologies, including Masterchain.
Rationale and Roadblocks
Sergei Pukhov, a leading expert at the Higher School of Economics, noted that a substantial share of transactions within the EAEU are carried out in dollars. Pukhov explained that the political and economic interests of member states hinder the adoption of their national currencies. Sergei Khestanov, an expert at RANEPA, speaks to this:
He did not rule out that a common currency might be launched solely to test the mechanism for future domestic use by member states.
