Bank of Russia advancing digital ruble project
The idea of national digital currency announced by Russia’s Central Bank in 2020 has been developed. The prototype of cryptoruble is likely to be presented already at the end of the year, while real transactions may be processed as early as 2022.
Russia’s Central Bank intends to launch a digital ruble prototype this year and start testing it in 2022, says CoinGeek citing the bank’s Deputy Governor Alexey Zabotkin. At a recent event hosted by the Russian Economic School, Zabotkin announced that the bank wanted to give citizens an opportunity to test the digital ruble, though initially without real-time transactions support. “Next year, based on that prototype and any additional developments needed, we will start testing it,” he said.
Presenting its idea of the digital ruble in mid-October of 2020, the Central Bank cited the reduction of costs and promotion of competition among financial institutions as advantages of the new means of payment. “A digital ruble can make payments faster, simpler and safer,” stated the regulator in its consultation paper.
At the time, the idea caused concerns among the country’s commercial banks, as they feared that the project would put them in direct competition with the Central Bank. Deputy Chairman of Sberbank’s Executive Board Anatoly Popov stated that the digital ruble “would juxtapose banks and the Bank of Russia, and instead of the further development we’ll have a competition”. Bankers also pointed to the centralised nature of the digital currency as a potential risk for users in the long term. Nonetheless, the digital ruble has received the support of the majority. According to Zabotkin, 83% of respondents polled by the regulator fully supported the project.
The regulator will monitor the digital ruble’s progress before deciding on the next course of actions. “We’re keeping on with the plan we earlier revealed,” said Zabotkin. “At this point, we’re in the process of developing the design of the digital ruble, which will be public and discussed with the market participants. The decision on the launch will be made next year based on testing results.”
Russia’s largest lender Sberbank has already started exploring alternatives to the Central Bank’s project. In December, it announced exploring a digital assets trading platform and its own token. The latter would yet be illegal under the current Russian legislation, points out CoinGeek, as the country doesn’t recognise any digital token including Bitcoin as legal tender.