A paper outlining the Central Bank of Russia’s monetary policy priorities for the years 2023 to 2025 reveals that it intends to start the full implementation of the digital ruble in two years. The monetary authority intends to gradually connect various financial institutions to the platform as work on the state-issued digital currency progresses.
The Central Bank of the Russian Federation (CBR) has recently published a draft document that sets out the main directions for its monetary policy in the next three years. The paper reveals that one of the key goals for the regulator will be the introduction of a digital version of the national fiat currency, the ruble, and reads:
In 2024, the Bank of Russia will begin to gradually connect all credit institutions to the digital ruble platform and increase the number of available payment options and transactions using smart contracts.
While the full-scale implementation of the digital ruble will begin in two years’ time, some of its features, such as the offline mode, as well as the connecting of non-banking financial organizations and exchanges, are expected in 2025, the Russian crypto news outlet Bits.media reported, quoting the bank.
The central bank digital currency (CBDC) will be introduced gradually, allowing market participants to adjust to the new circumstances, the CBR stressed. The bank added that additional restrictions might be put in place if necessary, such as limiting the number of digital rubles that can be stored in a single wallet or establishing a maximum amount that can be transferred with each transaction.
Although the Bank of Russia does not anticipate a significant outflow of money from bank deposits, critics have warned that the CBDC could potentially endanger the stability of the banking system. This is because traditional financial institutions draw capital by providing interest rates and bonus plans. The digital ruble should act as “an additional incentive to increase the attractiveness of bank products” for Russian banks.
According to the central bank, keeping money in bank accounts has some benefits over keeping it in digital wallets because the former generate income. The Bank of Russia does not intend to pay any interest on holdings of digital rubles on its CBDC platform because of this.
The most recent schedule for the digital ruble was released in response to an earlier official announcement that claimed the CBR was moving the project’s completion date forward. By the end of 2023, a roadmap for the full implementation of the new version of the national currency is anticipated, according to an announcement made in June by Deputy Governor Olga Skorobogatova.
The CBR is also getting ready to start trials with actual users and transactions in April of next year, ahead of schedule. In May, Skorobogatova acknowledged that the bank’s decision to quicken the development of the CBDC was influenced by the financial sanctions imposed by the West in response to Russia’s military invasion of Ukraine.