After years of tough sanctions, Russia plans to introduce its own central bank digital currency (CBDC), which could be ready for testing as early as April.
First Deputy Chairman of the Central Bank of Russia Olga Skorobogatova told the media that the bank plans to begin testing its CBDC on April 1, 2023. While the CBDC will aim for universal use in the country, it will begin limited testing to promote a robust system.
Olga Skorobogatova, First Deputy Chairman of the Central Bank of the Russian Federation. “We plan to launch the Digital Ruble project from April 1, with transactions involving individual transfers, as well as payments in trade and service enterprises.”
Although the Russian CBDC will have applications at the retail level, at the first stage it will be tested by banks and commercial circles. Later, smaller businesses will be able to participate in the testing process.
Russia follows China in CBDC
The Chinese were the first major economy to test the CDBC, called the digital yuan. Although testing of the digital yuan continues, it has yet to be used as a replacement for the legacy Chinese currency. While China has access to global capital markets, Russia has been under Western sanctions for years.
With the advent of the Russian CBDC, global transfers could become easier for the country. The US has the ability to effectively control access to the SWIFT system, which has forced Russia to create its own transfer platform, although it is not used by US allies due to the threat of sanctions.
Russia is a major producer of oil and gas, as well as minerals.
As sanctions against the country have limited its potential export markets, inflation has worsened in a range of vital commodities such as energy. CBDCs can help remove such trade bottlenecks, as the payment side of energy transactions is in many cases more complex than the delivery side.
