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Russia could introduce a “targeted” CBDC by 2023

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Russia could introduce a “targeted” CBDC by 2023

Key points to remember

  • The Bank of Russia today announced in a report the possibility of designing certain digital rubles so that they can only be used for specific purchases.
  • The central bank expects a digital ruble to also increase the availability of financial services and optimize cross-border payments.
  • A Russian CBDC would begin to be deployed in 2023.

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The Bank of Russia in its latest report indicated that a digital ruble will be rolled out from 2023.

Bank of Russia updates on the CBDC

Russia is moving forward with its digital ruble projects.

In its latest monetary policy update, the Bank of Russia noted that its central bank digital currency (CBDC) would enable the implementation of “targeting” technology, meaning that certain digital rubles could be designed to only pay for specific goods or services.

According to the central bank, targeting technology (or “coloring”, as it is also called) would increase the efficiency of public spending. Public procurement and government contracts were specifically mentioned as areas that could benefit from the technology.

The report provided a timeline for implementing the CBDC. Experimentation of real-money transactions and settlements of smart contracts on the digital ruble platform in 2023. Credit institutions should be connected the following year; the state will also be able to issue and receive payments in digital rubles. An offline mode, which will allow the integration of non-banking financial institutions, is planned for 2025.

A digital ruble would increase the availability of financial services (especially in remote areas), optimize the cost of settlements and help the development of a new payment infrastructure both within the country and with other countries, said the Bank of Russia.

The report follows Russian President Vladimir Putin’s decision to to forbid cryptocurrency payments. The Bank of Russia, however, has declared that it would not oppose the use of cryptocurrencies in cross-border settlements following the country’s ban from the SWIFT banking system.

Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.

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