The recent BIS report (Bank for International Settlements) on the principles and essential characteristics of a CBDC seems to have prompted central banks to enter the practical phase of digital currencies. Like Japan, which plans to launch the first tests on its CBDC next year, Russia has also just made a similar decision. To facilitate implementation and better position themselves in this market, five banks have decided to support the project of the country’s central bank. This voluntary participation in the various digital ruble pilots should follow the adoption of a law on digital assets. More details below.
Providing the most innovative banking technologies to Russians
In the group of five local banking institutions we find the Promsvyazbank supported by the state, the Moscow Credit Bank, Zenit commercial bank and Dom.RF mortgage bank. Last member of the country’s Central Bank partners, Russian National Commercial Bank of Crimea is the one who expressed the most desire to participate in the digital ruble pilots. It is explained by the institution’s desire to provide the population with the most innovative banking technologies. The first tests in question should also be held from the first semester of 2021.
In its report, the Russian central bank has big ambitions for its digital currency with the goal of mass adoption. Once this objective is reached, the currency should be used in particular to distribute wages and benefits to Russian workers. The institution has even said that users will be able to store and transfer future digital currency through a kind of bank card. In order to facilitate the use of the asset in shops, it was also planned to reconfigure the existing payment terminals to make them compatible with the digital ruble.
Russian law on digital financial assets passed on January 1
This year, Russia has put a lot of effort into further clarify the crypto space legislation in the country. Member of the Duma, the Russian parliament, Anatoly Aksakov even acknowledged that the country was ready to adopt the digital currency in terms of technology and legal aspects. He recalled that the actual launch of the first pilots next year should follow the adoption of the Russian law on digital financial assets on January 1. The statement was made shortly after the central bank’s official announcement to issue a CBDC in the country.
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The announcement by the central bank specifies that the digital ruble will be a form of additional money alongside the fiduciary. It is therefore not a question of replacing the traditional ruble, but of a cohabitation allowing the two assets to rise.