Russia Plans to Roll Out the Digital Ruble Across All Banks in 2024
The Central Bank of Russia plans to begin the complete implementation of the digital ruble two years from now, according to its monetary policy priorities for the 2023–2025 period. As the development of the state-issued digital currency progresses, the monetary authority intends to gradually connect various financial institutions to the platform.
Central Bank of Russia to Introduce Digital Ruble in 2 Years
The Central Bank of the Russian Federation
(CBR) has recently published a draft document that sets out the main directions
for its monetary policy in the next three years. The paper reveals
that one of the key goals for the regulator will be the introduction of a digital
version of the national fiat currency, the ruble, and reads:
"In 2024, the Bank of Russia will begin
to gradually connect all credit institutions to the digital ruble platform and
increase the number of available payment options and transactions using smart
contracts."
While the full-scale implementation of the
digital ruble will begin in two years, some of its features, such as the
offline mode, as well as the connecting of non-banking financial organizations
and exchanges, are expected in 2025, the Russian crypto news outlet Bits.media
reported, quoting the bank.
The CBR underlined that the phased approach
toward introducing the Central Bank Digital Currency (CBDC) will allow market
participants to adapt to the new conditions. The bank has noted that if
needed, certain restrictions may be imposed, such as limiting the number of
digital rubles that can be held in a single wallet or fixing a maximum amount
that can be transferred with each transaction.
Critics have warned that the CBDC could
potentially threaten the stability of the banking system, but the Bank of
Russia does not expect a large-scale outflow of funds from bank deposits as
traditional financial institutions attract capital by offering interest
payments and bonus programs. The digital ruble should serve
as "an additional incentive to increase the attractiveness of bank
accounts," for Russian Banks, the CBR added.
The central bank elaborated that keeping money
in bank accounts has certain advantages over storing cash in digital wallets as
the former accrues income. The Bank of Russia does not intend to pay
any interest on digital ruble holdings on its CBDC platform.
The latest timetable for the digital ruble
comes after an earlier official statement that indicated that the CBR is accelerating the
project’s schedule. In June, Deputy Governor Olga Skorobogatova announced that
a roadmap for the full implementation of the new form of the national currency
is expected by the end of 2023.
The CBR is also preparing to begin trials with
real transactions and users in April next year, earlier than initially planned.
In May, Skorobogatova admitted that financial sanctions imposed by
the West over Russia’s military invasion of Ukraine had played a role in the
bank’s decision to speed up the development of the CBDC.
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