The Bank of Russia announced yesterday the beginning of a pilot project for a digital ruble, central bank digital currency (CBDC) with a dozen institutions, including the biggest, Sberbank, VTB, Gazprombank, and Alfa Bank.
Russia’s ambitions to create a prototype digital ruble platform by the end of 2021 and begin testing in January 2022 were reiterated by the bank. The initial round of testing will include the issuance of the digital ruble as well as numerous other activities. Following that, the Bank of Russia intends to expand the number of participants and the scope of pilot operations.
Olga Skorobogatova, the first deputy governor of the Bank of Russia, stated that the digital ruble will improve payment availability while decreasing expenses.
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It is unclear whether or not the project will be constructed on a blockchain, and if so, which one. The first idea of the digital ruble, presented in October 2020, did not identify specific technology solutions and instead offered a list of possibilities for how the project may be implemented.
However, the idea alarmed Russia’s banking sector, which was concerned about the CBDC’s possible centralized architecture, which would imply direct rivalry for Russian accounts between them and the central bank.
Nonetheless, Bank of Russia Chair Elvira Nabiullina dismissed similar fears last year, claiming that the digital ruble would not pose a danger to commercial banks. The concept was adjusted to assuage banks’ worries, with them acting as middlemen, establishing digital ruble accounts for customers on behalf of the Bank of Russia.
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