Central banks globally are working on developing their central bank digital currencies (CBDCs), and Russia is expected to launch its coin in two years. The European country will follow China’s blueprint in developing its CBDC.
Central Bank of Russia to launch digital Ruble in two years
Officials of the Central Bank of Russia revealed that they are working on launching the digital Ruble by 2023. In a virtual conference yesterday, deputy governor Alexei Zabotkin and first deputy governor Olga Skorobogatova discussed how the central bank would launch its CBDC in 2023.
Zabotkin stated that “The emission of the cryptorouble will be akin to cash emission. It will be feasible to introduce limits on the transactions from the non-cash form into the digital rouble.” The country is working on launching the digital Ruble to complement the existing cash and non-cash Rubles. Thus, ensuring that the central bank can facilitate payments for individuals and businesses and make the use of its local currency more global in the face of Western sanctions.
The Central Bank of Russia previously revealed that it intends to implement digital Ruble infrastructure by the end of the year and test digital ruble prototypes by 2022.
Russia to emulate China in CBDC development
The officials also discussed some of the operational specifics of how the digital currency would work. For instance, the Central Bank of Russia intends to curb non-cash transactions so it can create a smoother transition to the digital Ruble. By narrowing non-cash transactions, the bank hopes to offset liquidity shortages when the digital Ruble rolls out.
The central bank will also deploy a two-tiered system, where it can distribute the digital Ruble to third-party firms like commercial banks, who in turn hand them to the users. Olga Skorobogatova, a Bank of Russia board member, added that it is vital to develop the CBDC since 73% of transactions in Russia are now digital.
“A digital ruble functions as a third form of money. Why a third form? We have cash, we have non-cash, and a digital ruble will look like a token of the Ruble, which incorporates the properties of cash and non-cash,” he concluded.