Closed validators will destroy the digital ruble – Group-IB


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Closed validators will destroy the digital ruble - Group-IB

Closed validators will destroy the digital ruble – Group-IB

  • The digital ruble can be a terrific analytical tool

  • Lack of transparency of validators calls into question the digital ruble project

  • The business community expects a return to the USSR era

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The lack of transparency of the national digital currency may have a bad effect on the fate of the project, experts at Group-IB believe

The digital ruble project will be successful only if transparency is maintained. This opinion was expressed in an interview with RBC by the head of Group-IB Ilya Sachkov.

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Closed validators will destroy the digital ruble - Group-IB

According to Sachkov, the digital currency of the Central Bank has potential, provided that the validators (network nodes that verify transactions) are built “on open source”.

“The mechanism for generating a new currency should be understandable, like in bitcoin, where we always know how many coins are on the market now, how many there will be tomorrow, where each one is,” he notes..

Full transparency of the entire payment chain, as well as the traceability of each digital ruble, can become a tool to fight inflation. Sachkov believes that the digital ruble, from the point of view of digital economy analytics, is “an amazingly convenient tool”.

The digital ruble is like a pandora’s box

However, digital currency can have downsides. So, for example, if the validators are located exclusively within the Bank of Russia and no one can access them, this, in the opinion of the head of Group-IB, “calls the project into question”.

Special concerns among industry experts are caused by the centralization of the future project. Since all digital funds of private banks will be stored exclusively in the Central Bank database, this may pose a threat to the country’s financial system, says Vladislav Martynov, board member of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (RACIB).

“If the unified system of mutual settlements of the Central Bank is hacked, the entire financial system of the country will suffer,” Martynov said..

The Central Bank’s intention to create a unified state platform for the turnover of the digital ruble suggests the appearance of a digital analogue of the State Bank of the USSR, he added.

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In case of failure to sell the digital ruble, the regulator, according to Martynov, will spend “a lot of taxpayers’ money.”.

“… then there will be a total failure – damage will be done to the country’s financial system, small and medium-sized businesses,” he said.

Conscious risk

Closed validators will destroy the digital ruble - Group-IB

Vasily Solodkov, director of the Banking Institute of the Higher School of Economics, also previously stated that the innovative component of digital currency is doubtful. According to Solodkov, the national digital currency is significantly inferior to cryptocurrencies in terms of opportunities. Solodkov believes that the digital ruble will not have such functions as anonymity, cross-border and finiteness.

The Central Bank itself admits that the digital ruble can deprive banks of some of the profits, but at the same time the digital currency will benefit consumers and business, said the head of the Bank of Russia Elvira Nabiullina at the OPORA RUSSIA leaders’ congress..

“So far we see that the main fears of the digital ruble are caused by banks, which perceive it as a factor in reducing their own profits,” Nabiullina said..

At the same time, the head of the Central Bank agreed that digital currency can carry certain cyber risks and influence on monetary policy.

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