The Central Bank of Russia (CBR) has commenced the trials for its Central Bank Digital Currency (CBDC) dubbed the Digital Ruble. As announced by the apex financial institution, two out of the initial crop of 12 banks that volunteered to join the trials successfully completed a full cycle of the new form of money transfers between clients using banking mobile applications.
According to the bank, the prototype design for the Digital Ruble was completed back in December 2021, and the rest of the banks who volunteered to participate in the trials will join when they have fully integrated the CBDC platform into their systems.
According to the CBR, the first stage of the trials involve the opening of a Digital Ruble wallet on platform, and the successful conversion of non-cash ruble into Digital Ruble, and the transfer of the latter amongst citizens.
“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. — During this year, we will test various scenarios and refine the digital ruble platform. In the next stages of platform development, we also plan to provide seamless interaction with digital platforms and digital ecosystems.”
The CBR is the issuer of the CBDC and then they will be distributed just as fiat currencies are currently operated.
Russian Digital Ruble and the Threat to Bitcoin
The trials of the Digital Ruble are expected to progress into at least two more stages, both of which will expand the operational functionalities of the CBDC.
However, the emergence of the Ruble is bound to energize the apex bank to maintain its stance in relation to the ban on Bitcoin and its associated operations such as mining. The People’s Bank of China (PBoC) trailed this ban path last, and this trend is notably growing amongst Central Banks that have floated their own CBDCs, Nigeria inclusive.