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Bank of Russia Steps Up Efforts to Issue Digital Ruble Due to Sanctions

Bank of Russia Steps Up Efforts to Issue Digital Ruble Due to Sanctions – Sanctions imposed in response to Moscow’s invasion of Ukraine have pushed the Bank of Russia to accelerate the development of the ruble’s digital version, according to Forbes’ Russian-language edition, citing CBR First Deputy Chairman Olga Skorobogatova. She made the announcement during a meeting hosted by the Association of Banks of Russia.

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According to the high-ranking official, Russia’s central bank had planned to begin the digital ruble pilot with real transactions and customers in 2024, but the project will now be launched in April 2023. Likewise, the regulator wants to begin implementing smart contracts using the digital ruble infrastructure.

Also Read: Senators Introduce Bill to Limit Use of China’s Digital Currency in the US

Last spring, the Russian Central Bank announced that a prototype of the digital ruble will be available by the end of 2021, with trials with commercial banks beginning in 2022. It began testing the platform in February of this year, and later that month, it revealed the first successful transfers between individual wallets.

The users could use mobile apps to open digital ruble wallets, exchange ordinary electronic money from their bank accounts for digital rubles, and then move the coins between themselves, according to the CBR. Skorobogatova stated at the time that digital currency transactions would be free for all Russians and would be available in all regions of the country.

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So far, a dozen Russian banks have applied to be part of the project’s pilot group, with three of them having already connected their systems to the central bank digital currency (CBDC) platform. According to the CBR, two financial institutions have successfully completed a full cycle of digital ruble transactions between clients.

Despite disagreements with the Ministry of Finance on the future of cryptocurrencies in Russia, the Bank of Russia began testing the digital ruble. The monetary authority suggested a blanket ban on crypto-related operations, whereas the ministry wants them legalized and controlled.

The issue is still being discussed in Moscow, but the central bank is sticking to its beliefs, claiming that legalizing their circulation will jeopardize the country’s financial stability.

Also Read: Elon Musk Says Spacex Will Soon Accept Dogecoin for Merchandise

Bank of Russia Steps Up Efforts to Issue Digital Ruble Due to Sanctions – Fitch analysts expect that the CBR will continue to campaign for a ban on decentralized cryptocurrencies in order to make place for the establishment of its own digital currency, according to Forbes.

They also believe that the emergence of a digital ruble will result in a withdrawal of funds from bank deposits, increased financial market competition, and higher interest rates.

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