The Central Bank of Russia plans to begin the comprehensive implementation of the digital ruble two years from now, according to a paper detailing its monetary policy priorities for the 2023 – 2025 period. While the digital currency is being developed by the government, the central bank plans to link various financial institutions with the platform.
Russia’s Central Bank to Introduce Digital Ruble Currency in 2 Years
Recently, the Central Bank of the Russian Federation (CBR), published a draft document which outlines the key directions of its monetary policies for the next three-years. It is clear that the central bank’s main goal will be to introduce a digital copy of its national fiat currency, ruble.
In 2024, Bank of Russia will gradually link all credit institutions with the digital ruble platform. It will also increase the amount of payment options available and smart contract transactions.
While the full-scale implementation of the digital ruble will begin in two years’ time, some of its features, such as the offline mode, as well as the connecting of non-banking financial organizations and exchanges, are expected in 2025, the Russian crypto news outlet Bits.media reported, quoting the bank.
CBR stressed that market participants will be able to adjust to new conditions by the gradual approach to introducing central bank digital currency. CBR also noted that certain restrictions could be put in place, such as limiting how many digital rubles can be stored in one wallet and limiting how much can be transferred per transaction.
While critics have suggested that CBDC could threaten stability of the banking sector, the Bank of Russia doesn’t expect large-scale withdrawals of bank deposits. Traditional financial institutions are able to attract capital through interest payments and bonus programmes. For Russian banks, the digital ruble should serve as “an additional incentive to increase the attractiveness of bank accounts,” the CBR added.
The central bank explained that keeping money in bank accounts is better than storing it in digital wallets, as they accrue income. That’s why, the Bank of Russia does not intend to pay any interest on digital ruble holdings on its CBDC platform.
The latest timetable for the digital ruble comes after an earlier official statement which indicated that the CBR is accelerating the project’s schedule. In June Olga Skorobogatova (Deputy Governor) announced that there is a plan for full implementation of the currency’s new format by 2023.
CBR plans to start trials in April with actual transactions and users, earlier than planned. In May, Skorobogatova admitted that financial sanctions imposed by the West over Russia’s military invasion of Ukraine have played a role for the bank’s decision to speed up the development of the CBDC.
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