Testing of the digital ruble has started in Russia with the country’s central bank announcing the first complete transactions between individual wallets. Although the Russian central bank is opposed to cryptocurrencies, it claims that its digital currency will provide new opportunities for Russians, citizens, and businesses.
Bank of Russia and Commercial Banks Accept Digital Ruble Transactions
CBR, the Central Bank of the Russian Federation and the participating financial institutions began testing the digitalized national currency. After the December 2021 completion of a prototype for the digital ruble platform, trials were launched.
Twelve banks were invited to be part of the pilot project group. Three have connected to the CBDC platform already. The regulator stated that two of the bank’s have completed the full circle of digital ruble transfer between clients via mobile banking apps.
According to CBR, users could open digital ruble accounts through these apps. This allowed them to exchange their regular electronic currency for digital rubles. Then they were able transfer the coins between themselves.
Based on two-tier construction, the digital ruble uses a 2-tier system. Bank of Russia operates the platform as the operator and issuer, with end customers accessing it through intermediaries. You can create wallets or conduct transactions through the bank’s mobile app. Olga Skorobogatova, the first Deputy Chairman of CBR was quoted saying:
Digital ruble is an opportunity for businesses, citizens and the state.
She explained that Russian citizens can make transfers with their sovereign digital currency at no cost and they are available everywhere in Russia. This system will allow companies to lower transaction costs, and also enable them to provide new services and products. Government will be able to make targeted payments or manage their budget spending.
Participants will concentrate on creating wallets to be used by banks and other private clients in the first phase of the trial. Processing payments will be the second phase, which includes implementation of smart contracts and transactions with the Federal Treasury.
Future plans include the introduction of offline transactions, and the eventual opening up to non-residents the opportunity to use the digital ruble. The piloting phase results will help to create a plan for full implementation of this new fiat currency.
In parallel to discussions on the future of Russian cryptocurrencies, CBR has been working on its digital currency. They were strongly opposed by the monetary authorities who proposed in January a ban on all crypto-related operations.
Its hardline position has made it isolated. Other institutions, such as the Federal Government and Finance Ministry, support regulation according to strict rules as an appropriate alternative to total prohibition.
How do you envision the future of CBDC projects, such as digital rubles? Please comment below with your ideas.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. The author and the company are not responsible for any loss or damage caused or alleged caused by the content or use of any goods, services, or information mentioned in the article.