The Russian Central Bank is set to commence “real-world” tests of the digital ruble in August, following the approval of crucial legislation by the State Duma, Russia’s parliament. The bill’s main clauses are scheduled to become national law on August 1, 2023.
The Central Bank announced its readiness to conduct a pilot using “real” digital ruble tokens at the end of March. However, the tests were delayed due to the lack of a necessary legal framework. The bank has established partnerships with 13 commercial banks in preparation for the pilot.
The urgency to develop a central bank digital currency (CBDC) stems partly from the US-led sanctions imposed on Russia following the conflict in Ukraine, which have limited the nation’s access to dollar-powered international trade. In response, Moscow-based firms have sought alternative currencies like the Chinese yuan and cryptocurrencies for trade deals. Russian citizens have also shown interest in opening yuan accounts and accumulating crypto assets, with potential consideration of China’s digital yuan.
Although the Central Bank opposes the use of cryptocurrencies in the trade sector, it appears willing to allow firms to use “private cryptocurrencies” temporarily. Instead, the bank favors solutions such as interoperable CBDCs, gold-backed stablecoins, and digital assets for the BRICS area.
The Central Bank has been working on its CBDC for some time and is now ready to proceed with real-world testing. To facilitate this, it created a bill in December 2022 that legislates for the establishment of a platform for the digital ruble. The bill grants the bank the authority to restrict individual commercial banks from transacting with its CBDC, define a “circle of users” for the digital ruble platform, and set transaction and threshold amounts. It also prohibits the accumulation of interest and the opening of joint wallets.
Olga Skorobogatova, the bank’s First Deputy Governor, previously stated the intention to launch “the first real operations” with the digital ruble in July-August of this year. Skorobogatova has also expressed interest in cross-border CBDCs, although she acknowledged the challenges in implementing such a system.
The recent remarks of Elvira Nabiullina, the Russian Central Bank Governor, highlight the idea of creating a single currency for the BRICS alliance, but she cautioned that it would be a complex project requiring the consent of multiple parties. Currently, efforts are focused on bilateral settlements using national currencies and the development of infrastructure connecting payment systems.
