Russia Begins CBDC Testing As the Fate of Crypto Hangs in Limbo
Russia, at the moment, has become the center of attention for people across the globe and industries owing to two major circumstances. First is the ongoing Russia-Ukraine conflict, the second being the cryptocurrency debate.
Russia Moves Forward With CBDCs
After proposing a ban on crypto mining and trading in the country, the Central Bank of the Russian Federation yesterday announced they are initiating the first stage of their Central Bank Digital Currency (CBDC) test.
Of the 12 banks from the pilot group that initiated interest in being a part of this process, three have already connected to the platform according to the Bank of Russia.
In fact, two of them have already completed an entire cycle of operation for the transfer of Digital Ruble between customers.
In order to conduct transactions using digital rubles, the Bank of Russia has enabled access to the digital wallet through the mobile application of any bank.
Furthermore, in the first stage, the bank has decided to test the issuance of digital rubles which will be conducted by the Bank of Russia itself.
Next on the list is launching digital wallets and to enable transactions among citizens. Post the successful completion of the first stage, the Bank of Russia is targeting to test the CBDC for payments.
At the same time implementation of smart contracts and interaction with the Federal Treasury will also be tested.
In regard to the announcement, The First Deputy Governor of the Bank of Russia, Olga Skorobogatova stated:
“The digital ruble platform is a new opportunity for citizens, businesses and the state. We plan that for citizens transfers in digital rubles will be free and available in any region of the country, and for business this will reduce costs and create opportunities for the development of innovative products and services.
During this year, we will test various scenarios and refine the digital ruble platform. In the subsequent stages of the platform’s development, we also plan to provide for seamless interaction with digital platforms and digital ecosystems.”
The bank further added that a roadmap would be implemented based on the results of the tests in the future.
To Ban or Not To Ban?
While the Central Bank focuses on CBDCs, members of the government in Russia have been suggesting their own methods to regulate cryptocurrencies.
Recently Putin President Vladimir Putin spoke in favor of crypto mining citing competitive advantage.
This was followed by reports of the bank now considering treating cryptocurrencies as currencies. Not so later, the Ministry of Economic Development called for taxing crypto upon its conversion into rubles.
It seems like Russia is following in the footsteps of the likes of Tunisia, China, and India where CBDCs have become the focus of the governments to escape the discussions of crypto’s legal status.