The Central Bank of Russia (CBR) issued a paper on its monetary policy goals and priorities for the 2023–2025 period. Digital Ruble is there.
Taking into account that Russia now has to deal with a wide range of economic (and not only) problems, it is obvious that the development of quite a futuristic concept is not the main topic for the central bank. Still 7 pages out of 150 go to the Digital Ruble and its influence on Russia’s monetary policy.
In its plans, Digital Ruble won’t replace cash, both will still exist. Assets on digital wallets will be accounted for on the balance sheet of the CBR and will be considered its obligations. Commercial banks will function as intermediaries between citizens and CBR.
According to the paper, the introduction of the Digital Ruble will provide a number of benefits, including the increasing availability of financial services (especially in remote and hard-to-reach areas), the development of new payment infrastructure and the reduction of transaction costs. It also mentioned that Digital Ruble will allow the implementation of a “colouring” technology — a special way to mark assets and send them for intended use, e.g. for buying special goods or services.
The Bank of Russia will introduce the digital ruble gradually.
- Presently, in 2022, the platform is being tested.
- In 2023, CBR plans to start piloting “real money” settlements between individuals (С2С), as well as between individuals and enterprises (С2В, В2С). In addition, in 2023, a limited number of participants will be given the opportunity to conclude smart contracts on the platform.
- In 2024, the Bank of Russia will start connecting all credit institutions to the platform, and will increase the number of available payment options and transactions using smart contracts. Step by step as the Federal Treasury connects to the platform, C2G, B2G, G2C, and G2B payments will become available.
- In 2025, the Bank of Russia plans to implement an offline mode of the digital ruble and connect to the platform non-bank financial intermediaries, financial platforms, and exchange infrastructure.
The CBR believes that the step-by-step process of implementation of the Digital Ruble will allow all the market players to adapt to the new conditions. Do you think the Bank of Russia will be able to stick to its plans or do you think that the outlook is too presumptuous? We continue to observe.