- The governor of the bank, Elvira Nabiulina, said that they are currently testing the operation of the CBDC with banks.
- This is a high priority project for the Russian state so there will be no more delays in its issuance.
- Pilot tests for the second phase of the project will begin in the fall, according to the first vice president of the issuer, Olga Skorobogatova.
The Central Bank of Russia (BCR) will start pilot tests in the real economy with the digital ruble next year, according to an announcement by the governor of the issuing institute, Elvira Nabiulina, during her appearance before the State Duma (Russian Lower House) this week, reported the EFE agency.
"We quickly created a prototype of the digital ruble, now we are testing it with banks," the official said. She also assured that in 2023, the bank will gradually test the digital currency in a pilot phase.
Currently, five Russian banks are participating in these tests in the second phase of the project. Seven more are expected to join the process in the coming months, Nabiulina explained to Russian lawmakers. The first phase of testing was completed in December 2021.
Specifically, the Russian financial entities involved in the project, together with the BCR, are testing the issuance of the digital ruble. Similarly, they are testing digital wallets and digital money transfers between users.
Nabiulina stressed that the digital ruble is not a cryptocurrency but a CBDC, which is backed by the Central Bank. She indicated that in addition to being used to make international payments, it will make transactions cheaper for consumers.
The first announcement about the plans to issue the virtual currency of the Russian central bank was made in the middle of last October.
A High Priority Project
The issuance of the digital ruble is not intended to replace the ruble in cash or the current electronic money, so both types of money will be complementary. Users will be able to buy and sell with the new digital currency through digital wallets.
Commercial operations with digital rubles to pay for goods and services will be able to be carried out by Russian users through mobile phones, PCs, and other electronic devices with and without Internet connection.
On the other hand, the first vice president of the Bank of Russia, Olga Skorobogatova, said this week that this is a priority project for the Russian state and assured that there will be no more delays for the following tests with the prototype currency.
On The Flipside
- Western sanctions against Russia have forced the Russian government and the issuing entity to accelerate tests with the digital ruble that seek to replace the dollar and the euro in international transactions.
- Skorobogatova complained about the unwillingness of certain banks in the country to participate in the CBDC pilot project.
- The official admitted that other banks are not sufficiently prepared to join the project, but she clarified that this will not affect 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
- As reported by Skorobogatova at the beginning of the year, the second phase of these pilot tests is scheduled for autumn.
- During this phase, the BCR will test the effectiveness of the CBDC in making payments for goods and services and government transfers through the Federal Treasury.
- The senior official also revealed that the central bank and the Federal Treasury plan to use blockchain technology to issue smart contracts.