The Bank of Russia to Experiment with Digital Ruble Payments

 The Bank of Russia to Experiment with Digital Ruble Payments

 

The Central Bank of Russia has emphasised the importance of moving forward with its digital ruble project. A statement by a top representative has confirmed the intentions of the government. The monetary authorities are keen to move ahead with the trials, despite the banks' inability to participate in them.

The digital ruble is "very much needed," First Deputy Chairman of the Bank of Russia, Olga Skorobogatova, recently remarked in a statement quoted by business news portal RBC’s crypto page. The high-ranking official elaborated: the regulator will not delay upcoming tests of the prototype currency platform. If we move quickly with testing and legislative changes, we can implement it in the coming years.

The Central Bank of Russia (CBR) started trials with the digital ruble in January and announced the first successful transactions between individual wallets in mid-February. At least a dozen Russian financial institutions are taking part in the experiments, which are expected to continue throughout 2022.

Skorobogatova admitted that not all participating banks are technically ready to take part in the tests right now. However, she insisted this should not affect the timing of the project to issue the Russian Central Bank's Digital Currency (CBDC).

Skorobogatova revealed earlier this year that the second phase of the trials is scheduled to begin in the fall. During that stage, the CBR plans to launch operations involving payments for goods and services with the digital ruble as well as government transfers. The bank will also issue smart contracts in collaboration with the Federal Treasury.

The digital ruble is the third incarnation of Russia’s national fiat currency, after paper cash and electronic bank money, which will be issued by the Russian Central Bank. Russians will be able to use it both online and offline. The CBR says its CBDC will create new opportunities for citizens, businesses, and the state.

Russia is struggling with the effects of the expanding western sanctions over the Ukraine war. This has called for emergency measures by Moscow to turn to cryptocurrencies as a means to circumvent the restrictions and finance international trade. An idea to make the digital ruble a reserve currency was also circulated last month as an alternative to reduce Russia’s dependence on the U.S. dollar. It is also noteworthy, that Russia’s foreign currency reserves abroad have been frozen due to the sanctions.