By
Tolu Ajiboye
April 17th, 2024
Russia has been banned from accessing the global financial system since the time when it invaded Ukraine.
Russia intends to roll out the pilot transactions of the country’s digital ruble, which could serve as a global payment method for the country.
Russia Reveals Its Plans for Digital Ruble
According to available information, the country has already started testing its digital ruble in preparation for real-world international transactions in 2022.
According to the Times of India, the Russian Central Bank finalized the first CBDC trials with Customer-to-Customer (C2C) payments as early as January 2022.
An official statement from Russia’s Central Bank has revealed that the country will not be delaying the creation of its CBDC. You’ll recall that the country has been working on its CBDC project since last year
Olga Skorobogatova, the first deputy chairman of the Bank of Russia, insisted on the critical nature of the digital ruble project for Russia, further confirming their commitment to take the next step.
Skorobogatova also said that there is no turning back for the country as he clarified that the technical unreadiness of a few banks would not stop it from continuing with its plans.
“If the bank takes timely decisions and moves quickly with testing as well as legislative changes, Russia will be able to implement the CBDC by 2023”, said Skorobogatova.
According to the deputy, the second phase of the project will be about testing whether goods and services can be paid for with digital ruble. Per Skorobogatova, it would also entail government transfers with the federal treasury. The Russian Central Bank also plans to issue smart contracts to support the Federal Treasury.
Citing the Central Bank of Russia’s governor, Elvira Nabiullina, the country’s finance department has structured a prototype and is now set to commence operations with financial institutions such as banks before launching their pilot transactions by 2023.
Consequences of the War
Addressing some of the concerns about the litany of sanctions being imposed on Russia, Janet Yellen, the secretary of US. The Treasury testified to lawmakers that the department is going to make sure that Russia is unable to avoid sanctions through crypto.
Already, Russia has been banned from accessing the global financial system since the time when it invaded Ukraine, and just yesterday, the US extended its sanctions to a number of entities related to Russia, including BitRiver, a Bitcoin mining firm.
Russia Takes a Stand
Russia, in response to these sanctions, has also begun working on expanding the pool of countries accepting the country’s MIR, which is Russia’s payment structure that is expected to help replace Visa and Mastercard payments after the two payment service providers suspended their operations in Russia.
Aside from that, there have been reports that Russia is looking to accept crypto payments from friendly nations while also stating that other countries looking to do business with it must pay in its national fiat currency.
Also, Sberbank, the largest bank in Russia, will start issuing and exchanging digital financial assets very soon, after it was granted approval by Russia’s Central Bank.