Russia is preparing digital rubles, while rumors say that several banks in Russia have tested transactions using the digital currency. The Central Bank of Russia is preparing to expand this digital transaction in rubles.
Russia is following in the footsteps of China, which launched the Digital Yuan last year. Despite its recent ban on cryptocurrencies, Russia says it will not act as a crypto miner as China does.
The Central Bank of Russia (CBR) completed a prototype of the digital ruble platform Bitcoin.com in December and is now beginning to experiment with transactions. There are 12 banks invited to join in the pilot phase of the project. Monetary authorities are gradually expanding the scope of participants to include providers of financial services and other types of transactions.
Currently, most Russian banks are preparing to test a new central bank digital currency (CBDC), according to Tass, the Russian News Agency. One of them, Promsvyazbank (PSB), is currently processing C2C payments, Maxim Khrustalev, adviser to the bank’s deputy chairperson, reported.
Three banks out of the 12 financial institutions that are part of the digital ruble pilot group have already integrated the CBDC platform, and two of them have completed a “full cycle of digital ruble transfers between clients using mobile banking applications,” the bank said. .
In the first phase of testing, users will open their wallets on the digital ruble platform via a mobile app, converting non-cash fiat money into CBDC and transacting using the latter tokens.
In the second stage, the bank plans to test the digital ruble as a payment for goods and services, as well as other possible implementations related to smart contracts and interaction with the Federal Treasury. In the future, the central bank also plans to introduce digital ruble payments in offline mode and provide the opportunity for transactions by non-resident customers, the announcement said.
Other banks participating in the first phase of the trial are Ak Bars, Alfa-Bank, Dom.rf Bank, Gazprombank, Rosbank, Sberbank, Soyuz Bank, and Transcapitalbank. The Federal Treasury, together with financial intermediaries, will join the second phase when conducting transactions between individuals and corporate entities, including consumer-to-business (С2B), business-to-business (B2B), and business-to-government (B2G).
For and against stakeholders’ views
There are supporters and opponents to this initiative. On the one hand, Olga Skorobogatova, first deputy governor of the Bank of Russia, declared that the digital ruble is a “new opportunity for citizens, businesses, and the state,” adding that such transactions will be free and available in any region of the country.
The Bank of Russia also noted that the digital ruble would be unique in that it will be accessible through a “mobile application of any bank serving the customer.”
The announcement by the Bank of Russia comes amid local reports claiming that it has officially opposed the concept of crypto regulation introduced by the Ministry of Finance on February 8 this year.
According to Vitaly Kopysov, Director of Innovation at SKB-Bank, the digital ruble will be a driver for the development of new national payment services for citizens and businesses. Speaking with Tass, he explained, “The digital ruble will provide an additional boost to the creation of offline cashless payment services for businesses without Internet access at the point of sale, which is very important given the geography of the Russian Federation.”
The digital ruble, on the other hand, has its detractors. In a press conference on Friday, Bank of Russia Governor Elvira Nabiullina stated that the authority would continue to fight the adoption of crypto in Russia by all means, saying, “We will spare no effort to convince the government and deepen our arguments because we see significant risks. I am counting on common sense here.”
By Audy Castaneda
