- The Bank of Russia announced in a report today the possibility of designing some digital rubles in a way that they could only be used for specific purchases.
- The central bank expects a digital ruble to also increase the availability of financial services and optimize payments across borders.
- A Russian CBDC would start being rolled out in 2023.
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The Bank of Russia, in its latest report, indicated that a digital ruble would be rolled out starting 2023.
Bank of Russia Updates on CBDC
Russia is forging ahead with its plans for a digital ruble.
In its latest monetary policy update, the Bank of Russia indicated that its central bank digital currency (CBDC) would allow the implementation of a “targeting” technology, meaning that some digital rubles could be designed to only pay for specific goods or services.
According to the central bank, the targeting technology (or “coloring”, as it is also referred to) would increase the efficiency of public spending. Public procurement and government contracts were specifically mentioned as areas that could benefit from the technology.
The report provided a timeline for the CBDC implementation. Experiments with real money transactions and smart contract settlements a on the digital ruble platform in 2023. Credit institutions are expected to be connected the following year; the state will also be able to issue and receive payments in digital rubles. An offline mode, which will allow the integration of financial institutions outside the banking sector, is planned for 2025.
A digital ruble would increase the availability of financial services (especially in remote areas), optimize the cost of settlements, and help the development of a new payment infrastructure both within the country and with other nations, the Bank of Russia stated.
The report comes on the heels of Russian President Vladimir Putin’s decision to ban cryptocurrency payments. The Bank of Russia, however, has stated that it wouldn’t object to the use of cryptocurrencies in cross-border settlements following the nation’s ban from the SWIFT banking system.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.