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Russia to Launch CBDC Trials, Testing Digital Ruble with 13 Banks

Russia embarks on transformative CBDC trials, enlisting 13 banks to test the digital ruble's potential for seamless transactions

Shashank Bhardwaj
Published: Aug 10, 2023 05:36:06 PM IST

Russia to Launch CBDC Trials, Testing Digital Ruble with 13 BanksImage: Shutterstock

Russia's central bank, the Bank of Russia (BoR), is set to initiate a pivotal phase in its central bank digital currency (CBDC) project. It will begin testing operations with digital rubles on August 15, 2023. The upcoming pilot program will see the participation of 13 Russian banks, alongside a select group of clients, to assess the digital ruble's functionality and usability.

This move follows closely on the heels of President Vladimir Putin signing the digital rubles bill into law, providing a legal framework for issuing and using a national digital currency. The BoR's strategic vision revolves around a comprehensive testing approach, aiming to refine procedures, ensure user-friendliness, and pave the way for wider adoption of the digital ruble.

During the initial phase of the pilot program, participants will focus on core processes, including creating and funding digital ruble accounts, peer-to-peer digital transactions, automated payments, and QR code-based transactions for everyday purchases. Users will be able to make payments using digital rubles at 30 retail locations spread across 11 major Russian cities.

This experimental phase is crucial to the CBDC's future trajectory. The BoR envisions the digital ruble becoming an integral part of the financial landscape, with individuals and organisations actively using it for various transactions by 2025. The pilot program's gradual expansion will also encompass business-to-business transfers and dynamic QR code-enabled payments in the coming years.

Experts speculate that the digital ruble could offer Russia a strategic advantage in bypassing certain financial sanctions imposed by Western nations. The technology underlying the digital ruble, based on permissioned distributed ledger technology (DLT) and smart contracts, could facilitate cross-border transactions and streamline Russia's financial infrastructure.

The global financial community is closely watching Russia's CBDC journey, especially in contrast to the European Union's timeline for launching its own digital euro in 2027. The success of the digital ruble pilot and subsequent implementation could have far-reaching implications, shaping the future of Russia's financial landscape and its interactions on the international stage.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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