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Tuesday, March 28, 2023

Bank of Russia Reports First Successful Digital Ruble Transfers Between Users

Bank of Russia Reports First Successful Digital Ruble Transfers Between Users – Russia’s central bank announced the first complete transfers between individual wallets, indicating that the digital ruble is already being tested.

The monetary authority, which has been a vocal critic of cryptocurrencies, claims that its digital money will open new doors for citizens, enterprises, and the Russian government.

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The Central Bank of the Russian Federation (CBR) and associated financial institutions have started putting the digitalized national fiat currency to the test. The testing began in December 2021, when a prototype of the digital ruble platform was created.

Also Read: Report Attributes Large Share of Global Crypto Crime to Russia, Moscow City

Twelve banks sought to be part of the project’s trial group, with three of them already connecting their systems to the CBDC platform. According to the regulator, two of the banks have successfully completed a full cycle of digital ruble transfers between clients using mobile banking applications.

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According to the CBR, users were able to use the apps to open digital ruble wallets, exchange normal electronic money from their bank accounts for digital rubles, and then move the currency between themselves.

A two-tier model underpins the digital ruble. The platform is issued and operated by the Bank of Russia, and end users access it through intermediaries. They would be able to build wallets and make transactions using any bank’s mobile app.

Olga Skorobogatova, the CBR’s first deputy chairman, was quoted saying:

“Citizens, businesses, and the government all benefit from the digital ruble platform”.

Russian people will be able to make free transfers using the sovereign digital currency from anywhere in the country, she explained. Companies will be able to provide new products and services thanks to the system’s lower transaction costs. The government will have a tool for making targeted payments and budget management.

Participants will focus on opening wallets for banks and private clients during the first stage of the trials. Processing payments, including for public services, smart contract deployment, and interactions with the Federal Treasury will all be part of the second stage.

Also Read: Bitcoin Outperforms Major Tech Stocks by an Average of 12%

Offline transactions will be introduced in the future, and non-residents will eventually be able to use the digital ruble. A roadmap for the complete adoption of the new form of fiat currency will be created based on the results of the piloting phases.

Parallel to current discussions about the future of cryptocurrencies in Russia, the CBR has been building its digital currency. The central bank has been a vocal opponent of their legalization, proposing a blanket ban on crypto-related transactions in January.

However, its harsh attitude has isolated it, as other Moscow institutions, such as the federal government and the finance ministry, have argued that regulation under stringent standards is a better approach than outright prohibition.

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