As the ongoing plans by the various central banks to develop a digital version of their national currencies gain traction across the world, Russia’s central bank has revealed that it intends to carry out the first settlement with the digital Ruble next year.
In his address to the Russian Parliament, the governor of the Bank of Russia highlighted the importance of the digital Ruble to the recovery and growth of the Russian economy.
Digital Ruble Trails are in Phases, with International Payment Considered
The Central Bank digital currency (CBDC) is becoming increasingly popular due to various governments’ reactions to digital currencies worldwide. The need to have a central bank-issued digital token pegged to the national currency has become attractive to the government as they see it as more acceptable than cryptocurrencies prone to price volatility.
As a result, Russia’s digital Ruble is expected to be launched no later than 2025. This follows the approved financial market development strategy that the Ministry of Finance recently released.
However, the Bank of Russia intends to test the viability of the digital Ruble in phases or settlements early next year. According to the bank’s chairperson, Elvira Nabiullina, a prototype of the digital Ruble has already been created, and the banking regulatory body has begun testing the CBDC with banks to see how it will be once fully launched.
Meanwhile, the Bank of Russia began trials of the digital Ruble in January, and the first successful transaction between two individual wallets was recorded in February. In the meantime, five banks are involved in the pilot stage, and a further seven will be added to the experiment in the next few months.
Nabiullina added that the digital Ruble is a win for all Russians and businesses because it can create more opportunities. In addition, the government will use the CBDC to settle some specific payments to boost critical parts of the economy.
Digital Ruble to the Rescue
According to the Bank of Russia Governor, the digital Ruble will come in handy when the country is under extreme sanctions by the international community over its decision to attack Ukraine. With the coming on board of the CBDC, settlements within Russia can be easily facilitated, as can cross-border payments between Russia and its trading partners.
The head of the bank also expressed hope that the Russian Parliament will proceed with the necessary legal amendments to the monetary policy of Russia to set the ground running for the commercial adoption of the Russian digital Ruble.
Notwithstanding the supposed timing, a top official emphasizes the need for the included banks to move in line with the scheduled date.
CBDCs appear to be the preferred choice of central banks worldwide in response to the emergence of digital currencies, which are expected to complement existing digital tokens without exposing the national currency to price instability.
With Russia battling to get its economy back on its feet amid sanctions, there is no better way to begin exploring than with the digital Ruble.