Work on the digital ruble began as early as 2021, i.e. before the invasion of Ukraine by Russian troops. However, due to the sanctions, the issue of its introduction is even more urgent.
Last year, as part of sanctions, Western countries blocked leading Russian banks from accessing the SWIFT international payment system. For example, Russians living abroad now cannot simply send money to their bank accounts in Russia. Cryptocurrencies are a solution to make relatively simple payments practically anywhere in the world, which should also be the case with the digital ruble.
Last year, tests of the digital ruble took place exclusively among selected entities in the Russian banking sector. Next week, according to the central bank, the tests will also begin among ordinary consumers, specifically, 600 people and 30 businesses in 11 different cities should be involved in them.
Digital ruble instead of bitcoin. Russia will begin testing a new currency next year
From 2025
According to First Deputy Governor of the Russian Central Bank Olga Skorobogata, the digital ruble should ultimately allow Russia to develop international payment transactions with other countries that also use digital currencies.
Moscow plans to fully introduce its own digital currency in 2025.
In the coming year, however, the central bank plans to expand the number of financial institutions involved in this system, as it stated Reuters agency.
Russia is far from the only country working on its own digital currency. 114 central banks are currently investigating the possibility of introducing such payments. Digital money of central banks is denoted by the abbreviation CBDC according to the English “central bank digital currencies”. It is essentially an alternative to cryptocurrencies.
A fundamental difference against cryptocurrencies
The main difference between CBDCs and cryptocurrencies is that CBDCs are under the control of a central bank, while cryptocurrencies are almost always decentralized. Cryptocurrencies – such as Bitcoin – are therefore designed to be outside the control of individual entities.
“Thus, CBDCs essentially expand access to non-cash central bank money. Now, in principle, only commercial banks have this, in the form of money in accounts with the central bank. In the event of a universal CBDC issue, it would also be acquired by other entities (e.g. citizens and companies, editor’s note),” stated the Czech National Bank (ČNB).
It will therefore be possible to use the digital currencies of central banks for both payment and savings. “CBDCs therefore represent a new, digital form of money issued by the central bank and, like current cash money, can be used as a medium of exchange and as a store of value,” the CNB said in a statement.
However, the Banking Council of the CNB has not yet taken any decision regarding the possible issuance of Czech CBDC. Only a working group was created to monitor and analyze the entire issue surrounding CBDC. All relevant departments of the CNB are represented in the group.
An alternative to cryptocurrencies. A global platform for central bank digital currencies is emerging
2023-08-09 13:53:17
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