Russia announces trial of digital Ruble

Karthik Subramanian

The Russian Central Bank has announced that it will be carrying out pilot trials for a digital ruble platform with 12 of the banks in the country.

The development of the ruble platform is expected to be completed by December and the trial is expected to start in January 2022 though details of the technology used and whether it will be on the Ethereum blockchain or Ripple would be used, hasn’t been explained. It also remains unclear whether the platform would be on a totally new blockchain built by the bank themselves, which is another option that is likely to be considered by central banks.

Olga Skorobogatova, first deputy governor of the Bank of Russia, says: “A digital ruble project is aimed to create new payment infrastructure to improve the availability of payments and transfers and to reduce their cost for households and businesses.

“For the convenience of its use, we need to ensure a seamless migration between the forms of the ruble. This is why it is highly important for us to cooperate with market participants at all stages of the pilot project. To organise this cooperation, we have promptly formed the first pilot group of banks for them to have enough time to technically and technologically prepare their systems and processes for piloting,’ he noted.

Central banks have been slowly coming around to the prospect that digital currencies are likely to be the way forward but while some banks have been very proactive in engaging with Ethereum or Ripple to push their digital currencies forward, some other banks are reluctant and they continue to crack down on digital assets in the hope that they would go away.

This is likely to disrupt the world of finance as we know if few central banks and countries switch to digital currencies and few of them don’t. While Europe and parts of Asia are trying to embrace this new technology, some others like the US have been reluctant to accept it. Recently Israel had conducted a trial for a digital shekel on Ethereum while central banks of Switzerland and France also have been conducting trials for digital currencies though they have not disclosed whether it would be on Ripple or Ethereum.

The central bank of Russia has said that the testing would be conducted over several months in various stages with the intent of publishing a roadmap for the implementation of a digital ruble in due course of time.

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