Deputy Speaker of the Russian Duma: Russia, China and India Should Develop a New Common Currency System

Call for building a “multipolar currency system”

Russia’s Deputy Speaker of the Duma Alexander Babakov said on March 29 that India, Russia and China should establish new financial ties under a new common currency as a priority. Russian news media Tass and others reported.

The remarks were made at the Russia-India Business Forum in New Delhi, India. Babakov explains:

India, Russia, and China are now countries trying to create a multipolar world that will be supported by many countries. Building such a multipolar structure should be based on new financial relationships, based on a new monetary system that serves our goals, rather than protecting the US dollar and the euro.

He also argued that the US dollar and the euro do their job thanks to rules set by the West, but those rules do not consider Russia, India and China as equal partners.

Are you considering using CBDC?

Babakov also suggests that central bank digital currencies (CBDCs) are also in mind when creating such a monetary system. He continued:

Our first goal is to create new rules in the financial sector to allow the already existing currencies to be used (in the new system).

It could be a digital ruble, a digital rupee, a digital yuan, or some other currency. Importantly, each of these currencies complies with the laws of the participating countries.

Russia’s ruble fell to the equivalent of 0.88 yen at one point in March 2022 following the invasion of Ukraine, but has now recovered to the equivalent of 1.7 yen.

According to IndiaTV, the meeting in New Delhi is also aimed at promoting business ties between India and Russia and encouraging Russian companies to enter the Indian market. Also, Russian oil giant Rosneft has just signed an agreement with an Indian oil company to increase crude oil supplies to India.

Since the economic sanctions imposed by Western countries, Russia has increased exports of energy resources to friendly countries such as India. Russian Deputy Prime Minister Alexander Novak said on Monday that Russian oil exports to India had increased by at least 22 times.

Commencement of digital ruble trading

Russian Central Bank Governor Elvira Nabiullina announced on March 21 that the central bank digital currency (CBDC), the digital ruble, is expected to start live trading in 2023. The Russian central bank has started a digital ruble pilot program from February 2022.

Nabiullina said the digital ruble will also be used for international payments.

connection: Russian central bank begins trial of digital ruble, maintains negative stance on virtual currency

China has already conducted multiple large-scale demonstration tests of the digital yuan. In January, the smart contract function was introduced. First, it introduced the ability to automatically identify order information on its e-commerce platform, allowing consumers to win money through a raffle.

connection: China introduces smart contract functions to digital yuan to strengthen consumer protection

What are CBDCs

A digital currency issued by the central bank of a country or region. It stands for “Central Bank Digital Currency”. The big difference from virtual currency is that CBDC is a legal tender. While it is expected to reduce costs and improve efficiency in currency management and settlement, there are many issues to be considered, such as protection of personal information and privacy, security measures, and impact on the financial system.

Cryptocurrency Glossary