Despite President Vladimir Putin asking his government and the central bank to hammer out a common regulatory regime for crypto assets instead of a complete ban, no consensus has been reached so far.
And now the Bank of Russia has gone ahead to roll out digital ruble trials. The launch is in line with the central bank’s intentions of diving into the pilot phase of the digital ruble project in early 2022.
Digital Ruble Trials Commence
The central bank of Russia has officially started pilot tests of its digital ruble, according to an announcement on Tuesday (Feb. 15). The bank said the first central bank digital currency (CBDC) transfers among Russian citizens had been successfully concluded.
Three of the banks from the pilot group have already connected to the digital currency platform, with two of them completing a complete cycle of digital ruble transfers between customers via mobile banking apps.
During the first stage, users are required to open wallets on the CBDC platform through mobile applications, and also turn their non-cash fiat money into the digital ruble before transferring the tokens to other customers.
The press release indicated that the central bank will be responsible for issuing the digital rubles as well as operating the CBDC platform. Clients will be allowed to transact on the platform through financial institutions. What sets the digital ruble apart is the fact that “it will be possible to access your digital wallet through the mobile application of any bank that serves the client.”
After the customer-to-customer transactions, the Bank of Russia intends to test the usefulness of the digital ruble as a payment method for goods and services, public services, execution of smart contracts, and also interaction with the Federal Treasury during the second stage.
Commenting on the development, Olga Skorobogatova, the first deputy chairman of Russia’s central bank, posited:
“The digital ruble platform is a new opportunity for citizens, businesses, and the state. We plan that for citizens transfers in digital rubles will be free and available in any region of the country, and for businesses, this will reduce costs and create opportunities for the development of innovative products and services. The state will also receive a new tool for targeted payments and administration of budget payments.”
The Bank of Russia also hopes to introduce digital ruble payments in places without internet access, as well as the chance to conduct transactions with the CBDC for non-Russians, the announcement said.
Crypto Regulatory Deadlock Continues In Russia
As aforementioned, Russia is presently at a deadlock regarding what to do about crypto regulation.
Last month, the Bank of Russia called for the banning of cryptocurrency mining and transactions on the grounds that these activities consume a lot of energy. But the Ministry of Finance opposed, saying it would be paramount to allow these burgeoning assets to thrive and regulation was instead necessary.
President Putin then urged the responsible officials to find a compromise as Russia has certain advantages in cryptocurrency mining owing to its surplus energy in the nation.
However, it has now been reported that the head of the Russian central bank, Elvira Nabiullina, held discussions Tuesday with Finance Minister Anton Siluanov and Deputy Prime Minister Dmitry Grigroenko but failed to reach a deal on how to regulate the crypto industry.
In other words, no common ground between the Bank of Russia’s crypto concerns and the government’s view of legalizing cryptocurrencies was established. Nabiullina stressed last week that the central bank will continue to convince the government about the significant risks it believes are posed by crypto.