Yesterday, the Governor of the Bank of Russia, Elvira Nabiullina, informed the State Duma about the progress of its central bank digital currency (CBDC) pilot, which started in August last year. As previously reported, the second wave of banks, including Russia’s largest bank Sber, is readying to join the digital ruble pilot.
Based on the results of the next wave, scaling will start, but not before 2025 at the earliest.
“We are asked the question: when will the digital ruble become a mass product?” said Nabiullina. “In our opinion, this will take five to seven years. This will be a natural process, because the choice of the people themselves and the business is fundamental; it should be convenient for them,” added Nabiullina according to the Parliamentary Gazette.
Targeting crypto for sanctions busting
During the same meeting, the central bank governor encouraged the use of cryptocurrencies for foreign settlement. RIA Novosti reported that the governor wants a sandbox-type setup. Nabiullina is staunchly against promoting cryptocurrencies domestically.
“Here we need to try in experimental mode for foreign economic international payments… We have long agreed to use digital currencies for foreign economic settlements… It seems to me that it would be desirable for us to quickly adopt this regime, work it out, see what is possible. And to introduce general legislation,” she said at a joint meeting of State Duma committees.”
Previously Russia had planned to use regulated digital financial assets (DFA) such as tokenized gold for sanction-busting payments. Domestically DFAs do not serve as payment instruments, but Russia recently passed legislation allowing them for cross border payments. The United States OFAC stepped in and extended its sanctions list to cover the first five licensed DFA platforms.
However, the OFAC list also included some crypto platforms used for offshore payments, including Rosbank partner B-Crypto.
With the current state of sanctions, the usage of the Chinese yuan continues to grow in Russia. According to the latest Russian central bank report, the yuan made up 53% of the foreign exchange market on exchanges and 39.6% over the counter (OTC).
