Bank of Russia Delays CBDC Pilot Rollout

The Bank of Russia’s central bank digital currency (CBDC) pilot, which was scheduled to begin on April 1, has been delayed indefinitely due to specific legislation only passing through the first reading in the Federal Assembly’s lower house. The legislation is expected to be enacted by early May, according to a report by the state-owned TASS.

The CBDC pilot was initially set to involve 15 private banks, but the number has since been reduced to 13. Some of the employees from these banks, along with one of the country’s largest insurance companies, Ingosstrakh, will become the test participants for CBDC retail payments.

Bank executives have expressed enthusiasm for the project, with the director of innovations at Sinara Bank, Vitaly Kopysov, stating that “the use of smart contracts should reduce the operational load of banks and make the deals transparent, which not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts.”

Although the pilot will involve real operations and limited consumers, the general public will be unable to participate in the first stage. The banks will enter the pilot with selected customers, and the Bank of Russia will determine how to scale the digital ruble further following the first stage.

The CBDC pilot was initially scheduled for 2024, but it was moved to an earlier date as the Russian central bank sought an alternative to the SWIFT payments system amid Western economic sanctions against Russia. The digital ruble aims to provide a secure and transparent payment system that reduces the dependence on foreign payment systems and minimizes the risk of financial crimes.

The Bank of Russia has been working on the development of the digital ruble since 2019, and it aims to provide an efficient payment system that can be used for various transactions. The CBDC will be a legal tender that will function similarly to traditional cash, but it will be digital and operate on a blockchain network.

The delay in the CBDC pilot rollout is expected to be a temporary setback, as the Bank of Russia remains committed to implementing the digital ruble. The CBDC will provide a secure and efficient payment system that will benefit the economy and the financial system as a whole.


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Bank of Russia to Debut Digital Ruble in April 2023

The first consumer pilot for the nation’s central bank digital currency (CBDC) will be rolled out by the Bank of Russia on April 1, 2023, as part of preparations for this day.

According to the first deputy governor Olga Skorobogatova, the Russian Central Bank is getting ready to launch the first real-world digital ruble transactions very soon. These transactions will include 13 local banks and many retailers.

According to a report by the regional news agency TASS, the official said that the future CBDC pilot would include genuine activities and real consumers in Russia, but that it will be restricted to a set amount of transactions and clients.

At the Ural Forum on Cybersecurity in Finance, Skorobogatova said that “We expect to begin the digital ruble project on April 1 with transactions including individual transfers as well as payments in trade and service organizations.” She went on to say that the financial institutions who were taking part in the pilot program had technically shown that they were prepared to begin testing the digital ruble.

The deputy governor provided clarification that regular consumers would not be allowed to participate in the pilot in the first stage, since banks would begin the pilot with clients who have been picked in advance. According to what Skorobogatova said, when the first stage of the pilot program is completed, the Bank of Russia intends to evaluate how to further grow the digital ruble.

The most recent declaration made by Skorobogatova is in line with the implementation strategy for the digital ruble that was publicly presented by the central bank in June of 2022. Because of Western economic sanctions against Russia, the consumer CBDC pilot was pushed up to a date that was originally planned for 2024 but was brought up to a date that was earlier because the Russian central bank was seeking for an alternative to the SWIFT payments system.

This information comes at a time when some Russian authorities are stating that the Bank of Russia is examining the possibility of a gold-backed coin that would target international commerce. Vladimir Chistyukhin, the first deputy governor of the Bank of Russia, is of the opinion that the creation of a “golden token” would assist Russia in the development of a new investment product that is appealing to investors and a payment mechanism that is required for international settlement.


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Gazprombank suggests banks be given more time to adjust to digital

Gazprombank, which is an unit of the main Russian government-owned gas business, Gazprom, has openly recommended that banks be given extra time before the implementation of the digital currency. Because of international financial restrictions and rising geopolitical tensions, progress on the country’s central bank digital currency (CBDC) initiative has picked up speed.

As was reported by local media on February 7th, Gazprombank, one of the 15 banks participating in the CBDC pilot, issued a public statement with a recommendation to proceed with caution regarding the interests of traditional banks. The statement read, “It is imperative that banks take measures to mitigate potential losses.” As a result, it is of the utmost importance to be aware of the possible dangers that are connected with the transition to a digital ruble and to approach its implementation with extreme care, giving the monetary system the time to readjust.

Nevertheless, the statement acknowledges that the CBDC will contribute to more openness across the whole of the Russian economic and financial system.

The Russian division of McKinsey calculated that conventional banks might potentially suffer losses of around $3.5 billion (250 billion rubles) in the first five years as a result of the adoption of CBDC. During the same time period, the consulting company predicted that the stores would make an annual profit of $1.1 billion.

The planning stages of a CBDC were initiated in Russia around the year 2020. The completion of the transition to the digital rouble, which is presently undergoing testing for settlement with the banks, is anticipated for this year. The most recent update to the Bank of Russia’s monetary policy indicates that the regulatory body would start the process of connecting all banks and credit institutions to the digital rouble network in the year 2024.

Additionally, the Central Bank of Russia has initiated the process of creating a cross-border settlement system that will make use of a CBDC. When Russia began a full-scale invasion of Ukraine at the end of February 2022, the nation was already facing rising financial and economic sanctions as a result of the intensification of the conflict between Russia and Ukraine.


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Russia’s Central Bank Plans to Launch its CBDC-Digital Ruble across all Banks in 2024

The Bank of Russia launched a digital ruble experiment in 2022 to explore business models and innovative use cases for central bank digital currencies (CBDCs).


The Central Bank of Russia emphasized that the pilot project aims to better understand the regulatory, legal, and technical aspects of CBDCs, and plans to launch an official digital ruble within a few years.

Russia’s central bank’s latest monetary policy said the country plans to connect the digital ruble platform to all banks and credit institutions by 2024.

In March 2024, a new round of elections will be held on whether the current Russian President Vladimir Putin will be re-elected. By then, the digital ruble is expected to have completed customer-to-customer transaction trials and customer-to-business and business-to-customer settlements.

To facilitate the rollout of the digital ruble, the Bank of Russia will also conduct a beta test of the digital ruble-based smart contract with a limited number of participants in 2023.

At the same time, it is expected that in 2025, the offline mode of the digital ruble will be completed.

The Central Bank of Russia stated:

“The phased process of introducing the digital ruble will provide market participants with the opportunity to adapt to new conditions.”

The Bank of Russia noted that the Russian economy is increasingly digitized, thus requiring an advanced payment system based on a government-backed digital currency.

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Binance Joins Association of Russian Banks, Strengthening Strategic Relations

Binance cryptocurrency exchange has joined the Association of Russian Banks (ARB), which arguably bolsters its relationship with top financial institutions in the country.


As reported by a local media outlet, Prime, the onboarding of the trading platform into the banking organization was accompanied by establishing a new department within the body. 

The department is called the Expert Center for Digital Financial Assets and Digital Currencies. Per the report, it will be led by Olga Goncharova, the Binance Exchange’s Russia and CIS head. As a frontline expert in the digital currency ecosystem, Binance, through the expert Center, will supply members of the association with technical insights related to digital currencies.

As detailed in the report, the new “Expert Center” will help compile “professional opinions on the circulation of digital financial assets and digital currencies” and provide members “with expert and analytical materials” on the topic of crypto, as well as providing “international experience.”

The role of Binance is assuming is pivotal in the overall emancipation of digital currencies in Russia as the ARB is a body that consists of about 290 banks. Despite the country’s largest banking organizations such as Gazprombank, Sberbank, and six others are not being enlisted as members based on a recent fallout, the organization still has a prominent presence in determining the direction of financial policies in the country.

The Russian government has been analyzing its potential moves related to its engagement with Bitcoin and other digital currencies lately. While the Bank of Russia has proposed a ban option, the move has been heavily criticized by some of the country’s local leaders, including Telegram founder and Chief Executive Officer Pavel Durov and Leonid Volkov, the Chief of Staff to the Russian opposition leader, Alexei Navalny.

The Bank has now resorted to banning Bitcoin mining, a move that it hopes will generally limit the circulation of the digital currency in the country. The ascension of Binance to the ARB may change the narrative even in ways that cannot be deciphered at this time.

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Bank of Russia Commences Digital Ruble Trials

The Bank of Russia (BoR) has announced the commencement of its Digital Ruble trials, making the most ambitious push for a functional Central Bank Digital Currency (CBDC) for the country.


As announced by the bank, the trials became necessary following the creation of a prototype of the digital ruble platform was completed in December 2021.

Following this completion, the Bank of Russia received volunteers from 12 banks to be a part of the trial exercises for the CBDC. Of these 12, three connected their system with the Digital Ruble platform, and two successfully changed non-fiat ruble into digital ruble and transferred this same funds to other people. All of them successfully opened a wallet that supported the CBDC.

“The digital ruble platform is a new opportunity for citizens, businesses, and the state. We plan that for citizens, transfers in digital rubles will be free and available in any region of the country, and for businesses, this will reduce costs and create opportunities for the development of innovative products and services. The state will also receive a new tool for targeted payments and administration of budget payments,” said Olga Skorobogatova, First Deputy Chairman of the Bank of Russia.” 

In addition, Olga confirmed that the BOR “will test various scenarios and refine the digital ruble platform this year. In the next stages of platform development, we also plan to provide seamless interaction with digital platforms and digital ecosystems.”

The Digital Ruble trial comes following the highly controversial plans by the apex bank to ban Bitcoin and all related Proof-of-Work (PoW) mining activities. The approach to prohibit the premier digital currency takes close precedence to associated actions by the People’s Bank of China (PBoC), which recently debuted its e-CNY CBDC at the ongoing Beijing Olympics games.

With more stages outlined for the Digital Ruble, the chances are that the BoR will introduce some sort of regulation to tame BTC for the Digital Ruble to have less competition when it finally sees the light of day.

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Russian gov’t and central bank agree to treat Bitcoin as currency

The government and central bank in Russia have reached an agreement on how to regulate cryptocurrencies, according to a Tuesday announcement.

Russia’s government and central bank are now working on a draft law that will define crypto as an “analogue of currencies” rather than digital financial assets, set to be launched on Feb. 18. Cryptocurrencies would function in the legal industry only if they have complete identification through the banking system or licensed intermediaries.

Kommersant notes that Bitcoin (BTC) transactions and possession of cryptocurrency in the Russian Federation are not prohibited; however, they must be done through a “digital currency exchange organizer” (a bank) or a peer-to-peer exchange licensed in the country.

The report also highlights that cryptocurrency transactions of more than 600,000 rubles (roughly $8,000) would have to be declared or be considered a criminal act. Those who illegally accept cryptocurrencies as payment will attract fines.

This news comes after months of speculation about how the Russian government would handle digital currencies. While it is still unclear what this decision will mean for businesses and citizens in Russia, it seems that the country is slowly warming up to the idea of cryptocurrencies.

Related: Russian central bank registers nation’s first digital asset manager

In January, the Bank of Russia called for a nationwide crypto ban in a report that warned about the speculative nature of the industry. The bank also stated that financial firms should not facilitate crypto transactions as part of that proposal to ban digital assets.

However, the proposal generated opposition from the Russian Ministry of Finance. A few days after the central bank’s call for a ban, Ivan Chebeskov, a ministry official, said that the government should regulate crypto rather than prohibiting it entirely. He warned that a total ban might result in Russia falling behind in technology

Reports have also emerged that President Putin supports efforts to regulate the country’s crypto mining sector.