Russia launches digital ruble pilot with 12 banks

The launch of the digital ruble pilot scheme comes as the Central Bank of Russia also proposes the country introduces “a ban on the organisation of the issuance and (or) issue, organisation of the circulation of cryptocurrencies (including by crypto-exchanges, crypto-exchangers, P2P platforms on the territory of the Russian Federation and establish liability for violating this ban”.

The Central Bank of the Russian Federation (CBR) may test a digital ruble for more than a year before it finally launches the CBDC, the bank’s chair, Elvira Nabiullina, said.

The 12 Russian banks taking part in the first phase of the Central Bank of Russia’s digital ruble pilot scheme have started or are ready to start trialling the central bank digital currency (CBDC) across a range of payment types.

Promsvyazbank has confirmed that it is already testing consumer-to-consumer (C2C) transactions made using the digital ruble, Tinkoff Bank is preparing to start similar tests in the near future and VTB says that it has the necessary infrastructure in place to begin piloting the CBDC.

“Piloting includes integration with the digital ruble platform and the introduction of services, such as opening an individual’s wallet through a mobile application and digital ruble transfers between individuals,” VTB told Russia’s Tass news agency.

The nine other banks taking part in the trial — Ak Bars Bank, Alfa-Bank, Bank Dom.rf,  Gazprombank, Rosbank, SberBank, SKB bank, Bank Soyuz and Transkapitalbank — are also due to begin trialling C2C payments using the digital ruble this month, according to Tass.

The Central Bank of Russia announced in December that it had completed a prototype digital ruble and that it was ready to begin rolling out a pilot starting with C2C payments between individuals.

Stage two

“The second stage of testing involves the connection of the Federal Treasury and the implementation of the functionality of smart contracts, as well as consumer-to-business (С2B), business-to-business (B2B), business-to-government (B2G) transactions, and so on,” the Tass report says.

“In the future, financial intermediaries, financial infrastructure (exchanges, brokers, marketplaces, insurance companies, and others) will be connected, an offline mode will be introduced, and the digital ruble will be exchanged for foreign currency and the possibility of opening wallets for non-resident clients will be provided.”

The bank has also stated that the pilot will focus on using the CBDC for domestic transactions and that it will not be trialling cross-border payments at this stage.

“So far, in many countries, cross-border payments have been left to the next stage. And the same is true in Russia,” the Central Bank of Russia’s Elizaveta Danilova is reported as saying in a separate Tass article.

“First of all, for example, we are starting this year to test the use of the Central Bank’s digital currency. We will also start with domestic payments and payments between citizens. And as far as I know, many regulators use this approach.

“Therefore, probably, cross-border payments, you can probably think about them, but so far this is not a subject for the near future.”

Cryptocurrencies: Trends, Risks, Measures report — which is open for public consultation until 1 March — also calls for “a ban on investments by financial organisations in cryptocurrencies and related financial instruments, as well as on the use of Russian financial intermediaries and Russian financial infrastructure to carry out transactions with cryptocurrencies” and the implementation of “a set of measures to limit” cryptocurrency mining in Russia owing to “the significant negative effects that it has on the energy, environmental and industrial sectors”.

 

Like this? Comment it. Share it.
You might also like
All Devices+ Free 10GB Global or 50G USA
Leave A Reply

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More