The Central Bank of Russia said on Wednesday that trials with 13 banks will begin next week as it plans a digital ruble pilot launch. The central bank’s trial programme for the CBDC has been in the works for some time, but President Vladimir Putin only approved the digital ruble law in July. The digital ruble is seen by Russia, which has been subject to severe financial sanctions from the U.S. and Europe as a result of its invasion of Ukraine, as a way to get around such limits.
Olga Skorobogatova, the Bank of Russia’s first deputy governor, stated in a statement that users and businesses should be able to utilise the digital currency “at their own request” as of 2025.
Programme of Work Meted Out
The central bank announced that beginning on August 15, participants from 13 chosen banks would start using and exchanging the virtual ruble at 30 predetermined locations around 11 cities. The first phases of testing will concentrate on simple automated payments, transfers between residents, and purchases of products and services via QR codes.
Users will be able to set up wallets or accounts, send money to another person, set up automatic payments, and make purchases using QR codes during the test. The test will use a genuine instance of digital money.
Only Exclusive?
According to the Bank of Russia’s official announcement, only a “limited circle” of customers will have access to the asset. According to a different Reuters story, 600 consumers are reportedly expected to participate in the programme. Skorobogatova also reportedly told Reuters that the bank “expect[s] to test operations with real customers.”
As per the Bank of Russia, by the end of 2023, the pilot programme will have more capabilities, dynamic QR code support, transfers amongst legal entities, and enhanced auto payment assistance. Separately, Reuters reported that 19 additional banks had expressed interest in the programme, which will allow for additional institutions to participate starting in 2024.
Bank of Russia Thinks of Expansion: Digital Ruble
According to Olga Skorobogatova, first deputy governor of the Bank of Russia, as the Russian Central Bank launches a digital ruble pilot, the issuance of the digital ruble for large-scale usage will be based on the results of stage testing. It can only be sanctioned after pilot testing of all potential scenarios of digital ruble transactions is successfully completed. It is anticipated that, by 2025, enterprises and individuals will be able to access and make transactions using digital rubles actively.
According to reports from the ground, the country’s residents are wary of the adoption of the new payment token. According to a Kommersant story, the Association of Russian Banks (ARB) wrote to the Bank of Russia seeking clarification on Moscow’s CBDC intentions and warning that people have been “wary” of the digital currency so far.
“[Russians] view the implementation of the digital ruble with considerable caution. The ARB heavily emphasised that consumers of financial services share the same perspective. Additionally, the Bank of Russia was urged in the letter to “propose the introduction of a direct ban on forcing citizens to open a digital ruble wallet.”
Will the Digital ruble pilot launch benefit Russia?
The digital ruble is now a means for avoiding the severe financial constraints the West has forced on Russia as a result of its heavy sanctioning by the U.S. and Europe. The Bank of Russia initially saw the project as a means of avoiding sanctions and a mechanism to monitor how the government is using funds designated for social programmes. It is claimed that the digital ruble would also enable regulating and restricting the methods by which individual citizens can use them. For example, parents will have transparency when it comes to their kids and their pocket money.
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