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Bank, Bank of Russia, Banks, CBDC, CBR, Central Bank, Digital Currency, Digital Ruble, Implementation, Launch, Monetary Policy, Priorities, Russia, Russian, Calendar, Calendar
The Central Bank of Russia plans to begin full implementation of the digital ruble in two years, according to a document detailing its monetary policy priorities for the period 2023-2025. As the development of state-issued digital currency continues, the monetary authority intends to gradually connect various financial institutions to the platform.
The Central Bank of the Russian Federation (CBR) recently published a draft document that defines the main directions of its monetary policy for the next three years. The document reveals that one of the main objectives of the regulator will be the introduction of a digital version of the national fiat currency, the ruble, and reads as follows:
In 2024, the Bank of Russia will begin to gradually connect all credit institutions to the digital ruble platform and increase the number of available payment options and transactions using smart contracts.
While the full-scale implementation of the digital ruble will begin in two years, some of its features, such as offline mode, as well as the connection of financial organizations and non-bank exchanges, are expected in 2025, the Russia reported Bits.media, citing the bank.
The phased approach towards the introduction of central bank digital currency (CBDC) will allow market participants to adapt to the new conditions, the CBR pointed out. The bank also pointed out that if necessary, certain restrictions can be imposed, such as limiting the amount of digital rubles that can be held in a single wallet or setting a maximum amount that can be transferred with each transaction.
Critics have warned that the CBDC could potentially threaten the stability of the banking system, but the Bank of Russia does not expect a large-scale outflow of funds from bank deposits, as traditional financial institutions attract capital by offering payments interest and bonus programs. For Russian banks, the digital ruble should serve as “an additional incentive to increase the attractiveness of bank accounts“, the CBR added.
Keeping money in bank accounts has some advantages over storing cash in digital wallets because the former generate revenue, the central bank explained. That is why the Bank of Russia does not intend to pay interest on digital ruble holdings on its CBDC platform.
The latest timeline for the digital ruble comes after an earlier official statement that indicated that the CBR is accelerating the timeline for the project. In June, Deputy Governor Olga Skorobogatova announced that a roadmap for the full implementation of the new form of national currency is expected by the end of 2023.
CBR is also preparing to begin trials with real transactions and users in April next year, earlier than originally planned. In May, Skorobogatova admitted that financial sanctions imposed by the West following Russia’s military invasion of Ukraine played a role in the bank’s decision to fast-track CBDC development.
Do you think the Bank of Russia will be able to introduce the digital ruble in 2024? Tell us in the comments section below.
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