The Central Bank of Russia may start testing the digital ruble in real-world scenarios as early as next month. This follows the parliament’s approval of a significant piece of legislation related to Central Bank Digital Currencies (CBDC).
The State Duma voted in favor of the bill this week, during its third reading, meaning the key provisions will become law as of August 1, 2023.
In March, the Central Bank declared readiness to initiate a pilot using actual digital ruble tokens. Although the bank had planned to commence testing in April in partnership with 13 commercial banks, this was postponed due to the absence of the necessary legal framework.
The bank’s accelerated pursuit of its CBDC can be attributed in part to US-led sanctions resulting from the ongoing conflict in Ukraine, which have effectively barred Russia from dollar-centric international trade. Consequently, companies based in Moscow are turning to other currencies, such as the Chinese yuan, and even crypto assets.
Despite the increased use of crypto in the trade sector, the Central Bank remains opposed, expressing preference for solutions like interoperable CBDCs, gold-backed stablecoins, and a potential BRICS-area digital asset.
The Central Bank has been developing its CBDC for a while and now seeks to advance to real-world testing. To facilitate this, it drafted a bill last December, legislating the foundation of a CBDC platform. According to the terms of the bill, the bank reserves the right to restrict individual commercial banks from transacting with its CBDC at its discretion, define a user base for the digital ruble platform, and establish transaction and threshold amounts.
The First Deputy Governor of the bank, Olga Skorobogatova, has hinted at plans to initiate the first true operations with the digital ruble in July-August this year. Skorobogatova also proposed the intriguing idea of utilizing CBDCs in regions that surpass national borders, expressing her fascination with the concept of cross-border CBDCs.
Skorobogatova’s statements arrive shortly after Elvira Nabiullina, the crypto-skeptic Governor of the Russian Central Bank, acknowledged the potential merit in creating a single currency for the BRICS alliance. Nonetheless, Nabiullina warned that implementing a BRICS token would be quite challenging.
