Russia on track to launch digital ruble pilot phase by 2023

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Central Bank of Russia (CBR) President Elvira Nabiullina, says Russia’s digital ruble will go into the pilot phase for international settlements by 2023.

The Central Bank of the Russian Federation is on the verge of releasing its solution for international settlements. Nabiullina revealed that by 2023, the digital ruble would be launched on a pilot basis for making payments to other countries.

Russia’s digital ruble making significant progress

Nabiullina made the statement while giving an address to the State Duma, the lower house of the Federal Assembly of Russia. According to a local news outlet report, Vedomosti, she noted that currently, the central bank has a prototype of the central bank digital currency (CBDC) that was being tested with banks.

“The digital ruble is among the priority projects. We have fairly quickly created a prototype… now we are holding tests with banks and next year we will gradually have pilot transactions,” she said.

These pilot transactions will be with other central banks worldwide that are willing to do business with Russia. The broad vision for the CBDC is that transfers between individuals will be free, while paying for goods services with it may attract a commission of between 0.4 to 0.7%, the report said.

Confirming the report, Reuters adds that Nabiullina also spoke of Russia’s alternative banking card solution, the MIR banking card. Furthermore, the central bank reportedly plans to expand the number of countries that accept payments through its home-grown solution.

Russia building digital assets capacity in response to sanctions

Russia’s push for digital asset solutions, as well as the expansion of its bank card payment system, have been necessitated by the number of sanctions the country is under. Since declaring war on Ukraine in February, the international community has moved to keep Russia out of the international market.

Russia’s financial sector has been kicked out of SWIFT, an international monetary messaging platform. Payment service providers like VISA and Mastercard have also ended their services to Russian banks.

The digital assets industry has also been implored to shun relations with Russia. While Russia has plans to recognize digital currencies, the IMF warned that Russia could use Bitcoin block reward mining to monetize its energy resources, thereby evading sanctions.

The U.S. also recognizes this risk and has added BitRiver, a Russian block reward miner, and its subsidiaries to its sanctions entities list. Similarly, the EU’s regulations have made Binance, the biggest digital assets exchange, announce that it is winding down its services to Russian nationals and entities.

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: CoinGeek New York presentation, Digital Currency as a Tool for Financial Inclusion