Russia has delayed its planned central bank digital currency (CBDC) rollout without providing any further timeline. The testing of the digital ruble was scheduled to start on 1 April.
According to state-owned TASS, the CBDC pilot launch has been canceled as the central bank is waiting to approve some of the specific legislation by the Russian State Duma, the Federal Assembly’s lower house. These legislations are expected to be adopted in April and effective in May.
Russia initially kept scheduled the CBDC pilot for 2024. However, the plans were preponed by a year as the Russian central bank is seeking an alternative to the SWIFT payments system amid heavy economic sanctions on the country by Western governments.
During the pilot, the digital ruble will be available only to a handful of program participants and not the entire population. It will be a real-time operation at a limited scale, and the central bank will determine scaling methods based on the results.
For the CBDC pilot, the Russian central bank has partnered with commercial banks in the country. Initially, 15 banks agreed to participate in the digital ruble pilot. However, the count came down to 13 as they only confirmed technical readiness to participate in the pilot with a limited number of customers.
“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,” said Vitaly Kopysov, Director of Innovations at Sinara Bank.
Central Banks Are Keen on Launch Digital Fiat
Apart from Russia, other countries are also pushing forward toward a central bank digital currency launch. China is at the forefront and has been running its digital yuan pilot programs for a few years now. Meanwhile, countries in Europe and Asia are also exploring the possibilities of a CBDC launch, even with the help of global banking bodies.
Most recently, the UAE central bank revealed its strategy for a digital dirham, as it is targeting to complete the first phase of the launch by the next 12 to 15 months, which will be around mid-2024. It will include the soft launch of mBridge, a project in collaboration with the Bank for International Settlements (BIS) and a few other central banks; the development of a proof-of-concept for bilateral CBDC bridges with India; and proof-of-concept work for domestic CBDC issuance…
