Digital Ruble: Potential Use For International Money Transfers

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Russia’s Central Bank is assessing the potential use for a Digital Ruble with Olga Skorobogatova, the bank’s First Deputy Chairperson of the Bank of Russia Olga Skorobogatova stating that  the digital ruble could be used in the future for international money transfers.

“As far as the opportunity for cross-border operations is concerned, this will be the topic when other regulators issue their currencies too. Not only China but at least several other players too. Then the possible integration with the peer level systems can be the case,” she said.

The European Union is also considering an opportunity of floating the digital euro and China is piloting a counterpart project.

The prospects for the introduction of the digital ruble are realistic, with a pilot launch possible at the end of 2021, according to Evira Nabiullina, the Head of the Bank of Russia This announcement came following a meeting of the Banking Regulator’s Board of Directors.

“After the discussion of the consultation report takes place, we will collect feedback by the end of the year. Then we will process them. If a decision is made on the feasibility of launching the digital ruble, we will prepare a full-fledged concept. Then, in our opinion, there should be a pilot stage with a limited number users in order to work out everything, so that we understand how it works. We think that this kind of pilot project is possible somewhere by the end of next year.”

Should a Digital Ruble be adopted, all economic agents, including individuals, businesses, financial markets participants and the government, will have access to it. Just like cash and non-cash rubles, a digital ruble will perform all three functions of money: it will act as a means of payment, a measure of value and a store of value. All three forms of the Russian ruble will be absolutely equal: as one cash ruble equals one non-cash ruble, one digital ruble will always equal each one of them.

Cambodia, which is close to making an agreement for a Free Trade deal with the Eurasian Economic Union, launched a digital currency last month.

In the same manner as cash and non-cash rubles, it will be possible to use digital rubles to pay for goods and services, make payments to organisations and the state, make funds transfers, pay for transactions with financial instruments and digital financial assets. Funds in digital ruble accounts will be replenished from a bank account or a bank card as well as with cash. All forms of rubles (cash, non-cash, digital) will be transferable into each other.

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