Central Bank of Russia will Advance Tests with the Digital Ruble -Breaking
- Elvira Nabiulina (the bank’s governor) stated that the CBDC is currently being tested with banks.
- It is an important project of the Russian state, so it will not be delayed.
- According to Olga Skorobogatova, the first vice president and chief executive officer of the issuer of bonds, pilot tests will be conducted for the second phase.
According to the EFE agency, the Central Bank of Russia will begin pilot testing in the real economy using the digital ruble next Year. This was announced by Elvira Nabinina, the governor of this issuing institution, during her presentation before the State Duma, the Russian Lower House.
The official stated that they had quickly developed a prototype for the digital ruble and are now testing it out with banks. In addition, she assured the official that in 2023 the bank will test its digital currency through a pilot phase.
Five Russian banks currently participate in the tests that correspond to the second stage of the project. Nabiulina told Russian legislators that seven more banks are likely to participate in the next phase. Nabiulina explained to Russian lawmakers that the initial phase of testing concluded in December 2021.
Particularly, Russian financial organizations are involved in this project along with the BCR. Similar to the previous, digital money transfer between users and wallets can be opened.
Nabiulina clarified that the digital Ruble isn’t a cryptocurrency. It is a CBDC which is backed and backed by Central Bank. It can be used for international payments and will also make it cheaper for consumers.
In the middle of October, the initial announcement regarding plans to create a virtual currency for the Russian central banking was made.
This is a high-priority project
Although the digital ruble will not replace current rubles in cash and electronic money, it is intended that both money types can be used together. Digital wallets will allow users to purchase and sell the digital currency.
Russian consumers will have the ability to conduct commercial transactions using digital rubles for payment of goods and services via their mobile phones and PCs, as well as other electronic devices that are connected to the Internet.
Olga Skorobogatova (first vice president of Bank of Russia) stated this week that it is a priority project of Russia and promised that no further delays will occur for testing the prototype currency.
- The West’s sanctions on Russia forced Russia and its issuing entity, the Russian government, to speed up tests using the digital Russian to try to replace dollar and euro in international transactions.
- Skorobogatova was unhappy about certain banks’ refusal to join the CBDC pilot program.
- While the official conceded that not enough banks have been prepared to sign up for the project, she stated that they will continue with its development.
The implementation of the digital ruble will depend on the “timely decisions” made by the bank, Skorobogatova said, as reported by the Times of India, and the approval of an appropriate regulatory framework for its full implementation in the coming years.
Why you should care
- Skorobogatova announced at the beginning the year that the second stage of these pilot trials is planned for autumn.
- This phase will see the BCR test the CBDC’s ability to make payments through the Federal Treasury for goods or services.
- A senior official revealed also that both the Federal Treasury and the Central Bank plan to utilize blockchain technology for smart contracts.