The Bank of Russia has announced that it will test a digital ruble in 2022. First Deputy Governor Olga Skorobogatova said that a digital Ruble prototype would be created in December at a press conference. Based on Distributed Ledger Technology, the digital ruble will likely use open source code that will have centralized control under the bank. Central banks around the world are actively working on digital currencies.
Russia has been looking into a CBDC for some time.
The first deputy governor said, “We’ve been looking at many projects, and many would like to say they have a ready-to-use product, but [they don’t] work for the digital ruble.” Russia has been looking into a CBDC for some time now, and the latest report is a result of feedback and internal deliberation. It will also rope commercial banks and institutions in on the pilot program. It is also being speculated that central bank digital currencies could even overtake SWIFT. Russia, however, continues to take a negative stance on cryptocurrencies.
The central bank will open wallets for commercial banks to store digital rubles.
The CBDC would function in a tiered system such that the central bank will open wallets for commercial banks to store digital rubles. These banks will then open wallets for clients. Smart contracts will also be a focus, as the central bank wants conditional transactions to be an option. The report also notes that the digital rubles will always be in possession of by the end-users. In the event of a bank’s bankruptcy, wallets will still be available through other institutions. Now that Russia has declared its intention to pursue a CBDC, it has officially joined the CBDC race. While no firm date has been set for when the CBDC will launch beyond pilot programs, the intention is clear. China and Japan are other major nations that are working on CBDCs.