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Russia hints at central digital currency

Photo of: Nathan VDH
by Nathan VDH

Russia’s “crypto-ruble (RUB)” project, its central bank digital currency (CBDC), seems to be gaining momentum after years of stalling.

Earlier this month, the Russian central bank announced that it is considering launching a digital token, after stating a year earlier that there was no need to issue a digital version of the rouble. But now, perhaps inspired by the rapid progress of the digital yuan project in China and the upcoming pilot projects of European central banks, the Russian Central Bank is moving up a gear on its crypto-ruble, and a number of the country’s banks are eager to get started.

According to Izvestia Media, Moscow Credit Bank, Promsvyazbank, ZENIT Bank, DOM.RF Bank and the Russian National Commercial Bank, mainly focused on the Crimea, have all approached the Central Bank to express interest in conducting pilot projects for this new digital currency.

The media reported that the head of the State Duma’s Financial Markets Commission, Anatoly Aksakov, expects the pilot to be launched “in the first half of 2021”, and said that provisions on CBDC issues could be included in future draft laws on cryptocurrencies.

A number of Russian banks are reported to have already begun preliminary work on creating digital portfolios compatible with the digital RUB. But some of the institutions interviewed by Izvestia seem to suggest that the international banking community is still far behind Beijing on CBDC issues.

The Central Bank added that its CBDC would allow users to benefit from lower commission rates compared to other payment and settlement methods.

It also said that a mobile application would allow offline purchases and transfers to be made, while a Zenit official said transactions would be available through ATMs, payment terminals, the banking application and Internet banking platform interfaces.

As a reminder, Russia has recently announced it will limit the amount of cryptocurrency that its citizens can buy. For more information, head to this article.