The Bank of Russia has suggested the possibility of issuing its own central bank digital currency, the digital ruble, in a new report published by the central bank today. The digital ruble will become an electronic version of the Russian national currency and will complement cash. The bank says that users will be able to use digital wallets for CBDCs and also convert their money “freely” between digital rubles into cash or bank accounts.
The bank reasoned that it wanted to introduce CBDCs because the use of “digital financial technology” is growing in Russia and elsewhere as more of its citizens now prefer cashless payments. In fact, the country ranks second in global adoption of cryptocurrencies in Eastern Europe, as a study from Chainalysis, a crypto research firm, suggests.
But when it comes to private use of cryptocurrencies, Russia is very strict on that. It has even issued new regulations on crypto trading and mining that will not allow its citizens to use crypto for payments from 2022 onwards. Meanwhile, a group of central banks from several countries recently gathered to discuss whether or not to introduce CBDCs in their jurisdictions. Russia is not part of this discussion.
The Bank of Russia aims to obtain feedback from the public, especially financial market participants, and “experts” regarding the digital ruble project. It is believed that this consultation will encourage public participation in the project. The bank said it would collect feedback and other data to ultimately pilot the CBDC project. In recent news, the European Central Bank has started surveying public opinion on the adoption of the digital euro.
It should be noted that the report does not specify a timeframe for the development of the digital ruble or whether it will launch a CBDC soon.