According to local media reports, the rollout of the Russian central bank digital currency (CBDC) will be postponed further. The rollout of the CBDC pilot is being delayed however participating banks have expressed their readiness to initiate the testing.
On Tuesday, the state-owned Russian media explicitly said that the CBDC pilot will not begin on its scheduled date i.e. April 1. This delay is because specific legislation has only passed through the first reading in the State Duma i.e. the lower house of the Russian parliament.
Now the legislation is anticipated to be enacted by early May with the number of private banks participating in the pilot reduced to 13 from 15. Some of the banks’ employees would become the test participants for CBDC retail payments, as well as one of the largest insurance companies in the country, Ingosstrakh.
The bank executives of the participating banks have expressed enthusiasm for the digital Ruble project. Vitaly Kopysov, the director of innovations at Sinara Bank, has counted on the project to bring transparency and also reduce operational costs. He briefed the media:
The use of smart contracts should reduce the operational load of banks and make the deals transparent, which not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts.
Sources reveal that the upcoming pilot will involve real operations and consumers, although it will be limited in scale. The general public will be unable to participate in the first stage, as the banks will enter the pilot with chosen customers. Following the first stage, the Bank of Russia will plan ways to take the digital Ruble further.
Notably, the consumer CBDC pilot was initially scheduled for 2024 but then was preponed as the Russian central bank sought an alternative to the SWIFT payments system amid Western economic sanctions against Russia. Following the sanctions placed on Russia, the authorities looked forward to a digital Ruble.
In November last year, Boris Titov, commissioner for entrepreneurs’ rights under the Russian president in his visit to Cuba said that the governments of both nations are looking forward to the use of Russian rubles and cryptocurrencies to facilitate cross-border cooperation.
CBDCs have become a very familiar concept around the globe and countries are actively exploring and experimenting with it. While nations are at very different stages of their individual CBDC development, China is said to be leading the race with huge giveaways to promote the adoption and with the payment applications integrating CBDC as an option.
The fame of CBDCs also received noteworthy attention from international entities like the Bank of International Settlements and SWIFT. Both agencies are developing platforms to facilitate users’ experience with CBDCs. Additionally, In a recent clip shared by a Twitter news outlet, Christine Lagarde, president of the European Central Bank (ECB), can be heard saying that central banks might lose relevance if they fail to adopt CDBC.
However, CBDCs haven’t been looked up in a positive light everywhere. In Nigeria, an African nation CBDC project is anticipated to be one of the most unpopular CBDC projects. The country launched its e-Naira in October 2021, but over 99% of Nigerians have refused to adopt it. The United States also maintained a very cautious approach towards CBDCs and the lawmakers expressed their concerns regarding privacy etc.