Bank of Russia extends digital ruble pilot completion to 2025

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The Bank of Russia has confirmed that experiments for the digital ruble may roll into 2025, quashing claims that a full-scale rollout could be achieved in the coming months.

The Bank of Russia disclosed that the central bank digital currency (CBDC) pilot will proceed with a phased approach, onboarding new commercial banks and technical partners in each phase, TASS reported. The slow-and-steady approach could see the digital ruble launched by 2025 as the central bank continues to test a range of use cases for the CBDC.

A digital ruble pilot has been underway since August following the establishment of a legal framework to support the experiment. The central bank confirmed that it will proceed with 13 commercial banks, pledging to expand the number of participating financial institutions in 2024 to stress test the offering.

“Next year the number of participants will expand, but will still remain limited. The pilot will continue at least until the end of 2024 and, if necessary, will be extended. Only after the completion of the pilot will the digital ruble be introduced into mass circulation,” according to the report.

The cautious approach of the Russian central bank is in stark contrast to the earlier claims of speeding up developments of a CBDC to circumnavigate the dire economic sanctions imposed by Western powers after it invaded Ukraine.

Apart from its tentative approach, TASS’s report raised eyebrows following the omission of Russia’s largest commercial bank, Sberbank (NASDAQ:SBRCY), from the first round of CBDC trials. Another notable absence from the list is Tinkoff, Russia’s leading digital bank, with enthusiasts optimistic about their inclusion in the next tranche of participants.

The initial group of commercial banks includes Transcapitalbank, Rosbank, Sovcombank, Sinara Bank, Qiwi Bank, MTS Bank, Ak Bars Bank, Promsvyazbank, Gazpkrombank, VTB, Alfa Bank, DOM.RF Bank, and Ingosstrakh Bank.

For the first phase, Russia’s digital ruble will involve 600 persons and 30 businesses across 11 cities with concrete plans to expand in the coming months. Central bank officials have clarified that citizens will not be forced to use the digital ruble but argue that a boatload of incentives will drive adoption levels.

Attracting users to the digital ruble

The Russian central bank is already exploring several functionalities for its retail CBDC offering, leaning on cross-border payment use cases. Since the start of the pilot, the central bank has struck bilateral partnerships with its allies to explore cross-border settlements using CBDCs.

On the domestic front, the central bank says it will proceed with free transfers for digital ruble transactions with commission fees for accepting digital ruble payments pegged at 0.3%.

“Free transfers of digital rubles for any amount is one of the main advantages of the national digital currency,” said the Bank of Russia. “This will allow citizens not to depend on the conditions and limits that banks set for their transfers.”

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Blockchain provides perfect foundation for CBDC