Bank of Russia Launching Pilot Digital Ruble (CBDC) in April
The Bank of Russia is set to launch the pilot CBDC in April, as revealed by deputy governor Olga Skorobogatova on February 17. The statement revealed that the CBDC pilot phase would accommodate retail purchases and facilitate peer-to-peer transactions.
The central bank’s official lauded the timely completion of the research conducted to determine the CBDC’s viability in peer-based transactions. Skorobogatova informed journalists that the pilot phase would feature an expanded scope for retail purchases.
CBDC Piloting on Selected Individuals and Banks
Skorobogatova’s address to the country’s recent fintech conference attendees emphasized that the pilot phase would feature real operations involving individuals. Nevertheless, she informed the audience that the digital ruble is leveraging the 13 banks that demonstrated their preparedness.
A report by Russian media Tass indicated that CBDC would pilot with a few selected clients. Skorobogatova informed the audience comprising fintech stakeholders that the Bank of Russia would evaluate the CBDC viability after the pilot phase. In particular, the bank executive indicated that the Bank of Russia would ascertain how to expand the digital Ruble project.
CBDC Viability to Break Dollar Dependency
The CBDC project began as a proposal in October 2020. The initiative saw the Bank of Russia publish a consultation paper detailing potential designs viable for the digital ruble.
Subsequent updates on the CBDC project indicated that introducing the digital ruble would lower the country’s dependency on the US dollar. The central bank portrayed optimism that the digital ruble would help Russia overcome the impact of foreign sanctions imposed by developed countries citing the invasion of Ukraine.
Modifying CBDC to Eliminate Burden and Safeguard Traditional System
The project’s release in April is a crucial milestone, given the prolonged delay of the pilot phase previously scheduled to launch in 2021. The digital ruble faced several hurdles, with the Russian banking community questioning the infrastructure.
The majority considered it burdensome to lenders and with the potential to centralize the banking system. The concerns prompted the Bank of Russia to modify the CBDC project as the banking community indicated that it would erode diversity and hurt players in the traditional system.
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