The Central Bank of Russia (CBR) is expanding its trails for the digital ruble it is developing. The CBR is now also exploring more use cases for the central bank digital currency (CBDC), including for use in settlement of real estate deals.
The CBR, as well as banks participating in testing the digital ruble platform, disclosed this to Izvestia, a local news outlet. Testing this use case is already ongoing, along with testing for use in making regular payments for goods and services.
The participating banks are also coming up with possible use cases for the CBDC. Vneshtorgbank (VTB) says it plans to test using the digital ruble to facilitate the purchase of digital financial assets (DFAs).
Meanwhile, Promsvyazbank (PSB) says it is looking forward to when the platform will have smart contract capabilities in April 2023. With smart contracts, carrying out real estate deals will be made even easier as there will be no need for a middleman or guarantor, the bank’s spokesperson explained.
“Smart contracts allow you to automate the execution of the terms of the contract without involving a third party in the form of a guarantor,” PSB said.
He added that in a hypothetical real estate transaction, the buyer’s funds could be held by the smart contract and transferred automatically to the seller immediately after the transfer of rights is registered. The funds are automatically sent back to the buyer when the transaction falls through.
Other banks participating, including Bank Zenit and Rosbank, expressed excitement at the progress the digital ruble is making.
Russia supporting its CBDC over digital currencies
As the CBR stated in April this year, they would launch the pilot to test their CBDC project for international settlements by 2023. At the time, Reuters reported that Russia plans for the CBDC to be used by April 2023 for real-world transactions too.
The digital ruble will effectively become the third recognized form of legal tender joining physical cash and bank digital payments. Russia is only willing to give digital currencies like Bitcoin the legal status of assets.
Regulations being worked on to regulate digital currencies, including the bill “On Digital Assets,” spell this out. The bill is making its way through the Russian parliament. But it is still facing some pushback from the CBR.
In a recent statement, CBR Governor Elvira Nabiullina said that digital currencies should not be allowed for use in the local market, being as risky as they are. They can only be safely used for international settlements, she opined.
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