Crypto currencies are still in their early stages, but in earlier years, this field was not taken seriously by many. Now, governments are struggling to incorporate their own currencies into this form. Since 2021, China has been actively using digital yuan for its citizens, and more is yet to come.
Russia’s Digital Ruble
The Central Bank of the Russian Federation’s (CBR) project for a central bank digital currency (CBDC) is rapidly developing. The first news about the initiative emerged in 2020, and in 2022, a draft regulation was presented to the lower house of the parliament, Duma, for final reading. However, as recently announced by Olga Skorobogatova, the First Deputy Chairman of the CBR, the widespread adoption of the digital ruble among the public will not happen until 2025-2027.
This timeline still appears optimistic in a global context. According to a recent PwC report, only 24 CBDCs may be implemented by 2030. However, for a country actively seeking ways to engage in international trade under heavy financial sanctions, such a timeline can be considered quite cumbersome.
Russia and CBDC
In 2022, the CBR announced plans to introduce the digital ruble in all banks in the country by 2024. It stated that the implementation would be gradual and involve comprehensive testing and infrastructure development. According to the central bank, the digital ruble will coexist with traditional cash and non-cash payment systems, providing consumers with greater flexibility in their transactions. In February 2023, Skorobogatova made a public announcement regarding the first consumer pilot application of the digital ruble, scheduled to start on April 1, 2023. The trial involved the participation of 13 local banks, numerous traders, and real consumers.
In the same month, Gazprombank, the banking subsidiary of the state-owned energy company Gazprom and one of the participants in the pilot application, suggested giving banks more time before implementing CBDC.
Due to estimates in a McKinsey report that Russian banks could lose $3.5 billion in commissions and fees within five years due to CBDC, the concerns of the bank are understandable.
On July 6, Skorobogatova stated that every citizen can open a wallet, acquire digital rubles, and use them in the “2025-27 horizon.”
Although all of this may sound very promising, the risks of excessive surveillance are turning digital currencies into a devil for many officials in various regions of the United States. According to them, as the government will have full control in the new monetary system, it will mean more surveillance over the citizens.
