Russian Banks to Test Digital Ruble CBDC on Customers in Upcoming Trials

Updated: 31 March 2023

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Russian banks are preparing to test the digital ruble, the central bank’s digital currency (CBDC), with their customers soon. The testing phase is expected to commence after they finalize the regulatory framework, which is expected to be completed by the end of April or May.

Russian Banks and Insurance Companies to Test Digital Ruble CBDC

The launch of the digital ruble customer testing pilot on April 1 has been postponed due to the legislation only passing through the first reading in the State Duma. However, the Central Bank is expected to test as soon as the regulatory framework is adopted. Anatoly Aksakov, the Head of the State Duma Committee on the Financial Market, stated that the law on the digital ruble is likely to be approved in April and implemented in May, with testing to follow shortly afterward.

Russian banks to begin testing digital ruble

Thirteen banks have confirmed their technical readiness to participate in the digital ruble pilot, involving a few clients, including some bank employees. Additionally, Ingosstrakh, one of the largest insurance companies in Russia, will also be part of the testing initiative.

According to Olga Makhova, Director for Innovation and Data Management at Rosbank, there are no challenges in the interaction between the different systems involved in the digital ruble project. Makhova also emphasizes that they are creating a platform for the future, and that any issues regarding the interaction of systems with the Central Bank and the digital ruble platform are promptly resolved.

Vitaly Kopysov, Innovation Director at Sinara Bank, suggested that smart contracts could help reduce the operational burden on banks and increase transparency for client transactions. Kopysov noted that this would decrease the potential for misuse of funds and simplify contract control. Additionally, Kopysov believes that the digital ruble’s primary objective is to create new opportunities for the state and businesses. Financial intermediaries such as banks will have access to a new infrastructure for transfers, including cross-border transactions, leading to new services and increased competition for customers in the financial sector.

Russia Accelerates Testing of Digital Ruble Project Amid Western Sanctions Pressure

Russia has been making progress on its digital ruble project since they announced it in October 2020. In December 2021, a prototype of the central bank digital currency (CBDC) platform was completed, and in September 2022, the Central Bank of the Russian Federation began testing the digital ruble platform.

During the project’s first stage, the bank conducted tests on the issued digital rubles, and three banks from the pilot group connected to the platform. Two banks completed an entire cycle of digital ruble transfers between clients using mobile banking applications. The project also introduced digital wallets, enabling clients to exchange non-cash rubles in their accounts for digital ones and transfer them between individual clients.

The project’s second stage focused on testing payments for goods and services at retail and service companies, as well as for public services and sales of smart contracts. The bank also explored the possibility of offline payments and conducting transactions with digital rubles for non-resident clients. According to reports, the ongoing pressure caused by Western sanctions has prompted Russia to accelerate the release of its CBDC.

In the upcoming pilot phase, selected customers will participate in simple operations with the digital ruble, although on a limited scale. The general public cannot participate in this initial stage, as the banks will enter the trial with chosen customers. Once the first stage is complete, the Bank of Russia plans to assess how to expand the digital ruble on a larger scale.