- Users outside of the Russian Federation will be able to access digital ruble wallets through the Central Bank of the Russian Federation (CBR) as well as exchange their rubles for foreign currencies.
- The Bank of Russia explored the possibility of issuing a central bank digital currency (CBDC) last year.
- Over a dozen banks and other stakeholders joined CBR’s digital ruble pilot group in June.
- Bank of Russia will invite credit organizations to participate in the first stage of the trials in 2022 and conduct consumer-to-consumer transactions.
Using the Central Bank of the Russian Federation (CBR) digital ruble wallets will be available to users living outside of its jurisdiction, as well as allowing them to exchange digital rubles with foreign currencies. These plans were revealed in the Central Bank’s “Main Directions for Digitalization of the Financial Market, 2022-2024” project published recently.
As of last year, the Bank of Russia was exploring the possibility of issuing a central bank digital currency (CBDC). To gather feedback from financial sector players, a consultation paper was published in October 2020. The regulator announced its primary architecture for the digital ruble in April 2021.
CBR set up a digital ruble pilot group with over a dozen banks and other stakeholders in June. CBDC plans to begin trials with the platform in January after completing its prototype by the end of December. The draft document indicates that it will gradually expand the number of participants and types of transactions.
In the first stage of the trials in 2022, the Bank of Russia will invite credit organizations to participate and carry out consumer-to-consumer transactions. Among the participants at the second phase will be the Federal Treasury, as well as financial intermediaries such as payment service providers, exchanges, brokers, and marketplaces.
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As well as smart contracts, offline mode, and the conversion of digital rubles into foreign currency, the company is planning to introduce smart contracts. Utilizing the digital ruble offline will make financial services more accessible to the population, according to the CBR. Lower transaction costs are expected with uniform fees. A targeted payment platform will also be available for citizens and businesses.
This document highlights one more time the risks associated with decentralized digital currencies like bitcoin, according to the Russian central bank. In light of their high volatility, cryptocurrencies cannot be used as a means of payment, according to the CBR. While the bank acknowledges that different approaches to regulation exist, it nevertheless identifies a trend towards a tightening of rules related to crypto. Additionally, the Bank of Russia believes CBDCs can respond to the need for safe digital payments.