Following the passage of a legal framework for the central bank digital currency (CBDC), all is set for the launch of the widely anticipated digital ruble pilot.
According to an official disclosure from the Bank of Russia, the CBDC pilot is scheduled to begin on August 15 and will adopt a phased approach. Olga Skorobogatova, First Deputy Governor of the central bank, confirmed that the pilot would stand out for using real digital rubles right out of the bat.
“This will allow us to test the operation of the digital ruble platform already in an industrial environment, work out all the necessary procedures with the involvement of clients, adjust processes, if necessary, and make sure that the client path is convenient and understandable for users,” said Skorobogatova.
The first stage of the pilot will see the Russian banking regulator attempt to iron out basic operations around the retail CBDC, according to the central bank. The bulk of experiments will revolve around the opening and funding of digital ruble wallets, transfers between accounts, and using a QR code for payments.
The Bank of Russia will begin the pilot with 13 commercial banks in 11 Russian cities. Despite a bold launch, selected residents in the pilot will only be allowed to use the digital rubles in 30 retail outlets.
There are plans to increase the number of participants and cities across the country before the end of the year.
For the second testing phase, the central bank plans to explore the use of dynamic QR codes, new templates for autopayments, and digital ruble transfers between corporate bodies.
“We plan to introduce the digital ruble into mass circulation based on the results of phased testing and subject to the successful completion of piloting all scenarios for operations with the digital ruble,” said Skorobogatova.
While initial reports predicted a full rollout by 2024, the Bank of Russia appears to have taken a conservative stance, eyeing a main launch in 2025.
The central bank recently launched the corporate identity for the digital ruble and issued directives for its portrayal by commercial banks and other financial institutions.
No pressure to use the digital ruble
Contrary to widespread speculations, Russian central bank officials have disclosed that the state will not force residents to use the CBDC. Skorobogotova stated in an interview that usage of the CBDC will be optional, but critics have pointed out that the government will trigger growth by utilizing a variety of incentives.
However, questions on privacy continue to linger on for the digital ruble as the newly minted digital ruble framework failed to make significant provisions on privacy guardrails. A supplementary clause conferring the central bank with broad powers to open and maintain digital ruble account casts the CBDC in a negative light among privacy proponents.
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
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