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Russia launching pilot test operations with digital ruble on April 1

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Indrani Bose Follow

INDIA

Feb, 28 2023

Feb, 28 2023

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In order to test individual transactions and retail payments, the Bank of Russia will start a digital ruble pilot in April.


At a symposium on cyber security and finance on February 17, deputy governor Olga Skorobogatova announced that thirteen banks who have expressed willingness will take part. These would be "actual transactions" with "genuine consumers" from 13 institutions that were prepared to participate.


At this time, the pilot won't involve any of the banks' ordinary clients. It will rather only involve a small number of participants. The P2P and retail payments trial will begin in April. Although the pilot will involve real money, only a small number of transactions and consumers will be involved.


Beginning in April, the Central Bank of Russia intends to start testing genuine consumer transactions using digital rubles. More than a dozen institutions would participate in the upcoming phase of the pilot project. Payments between trade and service organizations and transfers between individuals would be the first steps in the plan.


There would be a cap on both the initial volume of these transactions and the number of participating clients. The banker said this on the sidelines of the Cybersecurity in Finance symposium in Yekaterinburg.


Ordinary clients will not be able to participate in the testing at the initial stage. The regulator will be able to decide how to scale the usage of its central bank's digital money after the testing are through (CBDC). All technical and operational tests were passed by the participating banks, allowing them to begin the trials on April 1.


Russia had intended to start testing a digital ruble in 2021 but postponed the project due to bank fears that it may centralize the banking system.


A prototype of the CBDC platform was completed in December 2021, while the digital ruble project was first revealed in October 2020. In January 2022, the pilot phase began. The lower house of the Russian parliament received a bill on the digital ruble in January of this year, and the CBR plans to fully introduce the country's digital currency by 2024.


Russia has intensified efforts to complete its CBDC under pressure from Western sanctions. Plans include using the state-issued coin to pay for public services, developing smart contracts, and offering offline transactions. The opening of digital ruble wallets has already been tested. 


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Indrani Bose

CBW - External Analyst

INDIA

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