Bank of Russia may pilot digital ruble in 2021
The Central Bank of Russia considers the launch of digital ruble promising and eyes testing it in late 2021. The regulator will collect feedback on the project of the digital currency until the end of this year to make a final decision.
Russia’s Central Bank might pilot its own digital currency at the end of 2021, says CoinDesk citing the Bank of Russia’s head Elvira Nabiullina. “We view this project as promising, it fits into the concept of the digital economy [currently being built in Russia],” said Nabiullina during an online press conference on 23 October. She added that the regulator wanted to evaluate the balance of risks and advantages of such project before proceeding with it.
According to Nabiullina, the pilot with a limited set of users “might be possible at the end of next year”. It is not yet decided if transactions will be transparent to observers, although “maximum trust and maximum confidentiality” are key goals for the project, the Central Bank’s governor stressed. “People and enterprises want fast, convenient, almost immediate payment transactions,” she said. The bank also believes that the digital ruble may help diminish the dependence of the Russian economy on the US dollar and the threat of future sanctions on Russia.
If issued, the digital currency will not replace or push out other forms of money, such as physical cash and electronic payments. “People will decide for themselves what kind of money for what kind of purposes they want to use,” Nabiullina said adding that dedicated financial education programmes should be offered to help people understand how to use the new means of payment. The Bank of Russia is considering making the digital ruble available both online and offline, but there is currently no feasible technological solution. The need for robust cybersecurity and the potential feature of the offline use are the main challenges for the digital ruble.
Earlier in October, the Bank of Russia published a report on the digital ruble saying that the decision on whether the currency would be actually launched and whether it would use the blockchain technology was up for discussion. According to the report, the digital ruble will stimulate innovation and competition in the financial sector as well as help ensure that funds allocated to government-backed projects are not misappropriated.
Currently, the regulator is receiving feedback on that report. The process will last until 31 December and be followed by an evaluation, after which the authorities will make the decision on whether to proceed with the launch.