The Central Bank of the Russian Federation (CBR) and Financial Institutions have recently participated in testing their CBDC. The experiment was implemented after the prototype of the digital ruble platform was completed in December, 2021.
12 banks have applied to join the pilot group for the project and three of them have connected their systems to the CBDC platform. Two of the banks have successfully completed the full cycle of digital ruble transfers between customers using mobile banking applications, the regulator explained.
Users can open digital ruble wallets through the app and exchange fiat money from their bank accounts for CBDC and even transfer it between them.
CBDC or known as Digital Ruble is based on a two -tier model. Bank of Russia is the manufacturer and operator of the platform while end customers access it through intermediaries. They will be able to create wallets and conduct transactions through the mobile app of any bank.
The system will also reduce transaction costs for companies and allow them to offer new products and services. The government will have tools for targeted payments and budget expenditure management.
CBR has developed its digital currency in line with ongoing discussions about the future of cryptocurrencies in Russia. Monetary authorities have vehemently opposed it and proposed a comprehensive ban on crypto-related operations in January.
However, this is opposed by ministries in the government which tend to allow cryptocurrencies. The federal government and the finance ministry, support the regulation being implemented, as a more appropriate approach than a total ban.
