A Russian bank, one of the country’s largest by assets, has conducted a successful trial with digital ruble transactions processed through its mobile app. The state-owned Promsvyazbank was one the institutions placed under Western sanctions earlier this year in connection with Moscow’s actions in Ukraine.
Russian Bank Tests Digital Ruble Transfers by Mobile Application
Promsvyazbank is the Russian lender that joined the Bank of Russia’s trials of the digital currency issued by central banks (CBDC). Plus Journal reports that the bank tested digital ruble transactions via its mobile application.
The participants needed to register in the application. They also had to create a digital wallet. Participants were then able to use their bank account to convert regular bank money into digital rubles, and to transfer digital cash between clients of the bank, as well as other participating banks in the pilot program.
All the information about the performed transactions was provided by the digital ruble platform operated by the Central Bank of Russia (CBR), and was immediately reflected on the balances of the users’ digital wallets in the smartphone app, the report details. The platform’s prototype was launched by the monetary authority late last year.
“PSB is one of the first banks to implement a simple and understandable technology for making transactions with digital rubles in a mobile application and successfully test it. We see great potential in this instrument, which we expect will become a new settlement standard in the Russian economy,” stated Senior Vice President Alexander Chernoshchekin, who heads the bank’s digital business unit.
According to the top Russian executive, the success of the testing has laid down the basis for future operations in the digital ruble. It also opens up new opportunities and possibilities for companies and the Russian public. He explained that the public will be able to make secure and reliable digital currency transfers, while the government will be able to manage budget payments and target social payments.
Chernoshchekin stated that businesses will be able to automate all their payments using the new settlement technology. The digital ruble ecosystem is managed by Bank of Russia. Officials at CBR claim that all payments are encrypted and protected from fraud.
A dozen credit institutions joined the test of the digital ruble. Once their systems can connect to the CBDC platform and are complete, the trial will begin in 2022. Russia has accelerated its timeline for the project and aims to launch the digital currency fully in 2024.
Promsvyazbank, Russia’s top 10 bank by assets and deposits is a leader. Once a private bank owned by Russian oligarchs, the brothers Dmitry and Alexei Ananyev, it was nationalized by the Russian government in 2018 and has since been recognized as a bank supporting Russia’s defense industry. It has been targeted with sanctions imposed over Russia’s military intervention in Ukraine.
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