The Central Bank of the Russian Federation (CBR) moves forward with its plans to create its own digital ruble by 2024.
The anticipated launching in 2024 would take place in a significant year for the country as it is set to hold presidential elections in March of that year. Initial reports indicate that incumbent President Vladimir Putin has a strong chance of gaining a second term, but anything can happen by then.
Russia CBDC For ‘Targeted’ Technology
The CBR said that its CBDC would permit the use of a so-called “targeted” technology, which means that certain digital currencies may be programmed to exclusively pay for particular goods and services.
The central bank anticipates completing pilot tests of “real money” customer-to-customer transactions and customer-to-business and business-to-customer settlements by 2024.
While the full-scale deployment of the digital ruble will begin in two years, some of its characteristics, such as offline mode and the linking of non-banking financial organizations and exchanges, are expected in 2025, according to crypto news portal Bits.media.
Rosfinmonitoring, Moscow’s financial monitoring agency, stated last month that it was employing software to track cryptocurrency transactions and hoped to increase its powers as the country enacts restrictions on “cryptomania.”
Meanwhile, the central bank has long expressed skepticism over cryptocurrencies, citing financial stability concerns, and has urged for a complete ban on trade and mining, in contrast to a government intent on regulating the sector.
Is Russia Really Open To Crypto?
The Russian central bank has stated though that it is open to cryptocurrencies being used for foreign settlements and has allowed other transactions involving digital assets.
Russia’s cryptocurrency market is flourishing as more investors pour in. According to some government officials, the value of cryptocurrencies in the country might exceed $214 billion.
Based on a recent study by Chainalysis, Russia rank second in crypto adoption in 2020, while TrippleA, a Singapore-based research organization, predicts that approximately 17.4 million Russians possessed cryptocurrencies at the beginning of the year. The number reflects 12 percent of the country’s population.
Conservatives have cautioned that the CBDC might pose a risk to the sustainability of the Russian banking industry, but the CBR does not anticipate a significant outflow of money from bank accounts because traditional financial institutions draw in capital through interest payments and incentive programs.