Russia Officially Launches The Digital Ruble
A national roll out to all Russians who need digital ruble use for international transactions is expected by early 2025
Russia has officially launched the Digital Russian Ruble, with it becoming operational from August 1st. This will help Moscow conduct foreign trade in the face of Western sanctions, according to Vladislav Ginko, of the Russian Presidential Academy of National Economy and Public Administration (RANEPA).
Ginko has stated that “Russia’s membership in the Bank for International Settlements (BIS) is currently suspended. However, the Digital Ruble is not based on a single protocol and therefore cannot be visible to the Basel-based BIS. Quite the contrary, with the help of the Digital Ruble in foreign trade, it is possible to effectively bypass the financial sanctions of Western countries.”
The idea of introducing a national digital currency was unveiled by the Bank of Russia in late 2020. Unlike virtual currencies such as Bitcoin, the Digital Ruble is said to pose minimal risk as it will be issued by the state monetary regulator and backed by traditional money.
The Bank of Russia stated on Wednesday (August 16) that “The launch of pilot operations with real Digital Rubles is the most important stage of the project. This will allow us to test the operation of the Digital Ruble platform already in an industrial environment, work out all the necessary procedures with the involvement of clients, adjust processes, if necessary, and make sure that the client path is convenient and understandable for users.”
Citizens and businesses should be able to use the central bank digital currency “at their own request” from early 2025, said Olga Skorobogatova, first deputy governor of the Bank of Russia in a statement.
Regulations stipulate that the Digital Ruble can be used for transfers and payments, while the currency is kept in digital wallets on a platform operated by the Russian Central Bank. It will not be possible to open a deposit, take out a loan, or receive interest on digital currency.
The bank has started pilot transactions with Digital Rubles involving a limited number of clients from 13 Russian banks. These will be involved in actual, real-world transactions, and began on August 15 (Tuesday) with a full rollout to any Russian banking client who requests the service – with expected use mainly for international transactions – in about 18 months.
Chris Devonshire-Ellis, of Dezan Shira & Associates comments “Perhaps co-incidentally, the Bank Of Russia’s most recent economic trends report states that sanctions against Russia are expected to last until 2026, a comment made that could have factored in the transactional impact of the Digital Ruble in Russia’s global trade. This implies that the West’s sanctions will be left behind as an old tech mechanisms unable to compete with new tech developments.”
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