Bank of Russia Plans to Pilot Digital Ruble in 2021 End

The Bank of Russia is planning to launch a prototype of its central bank digital currency (CBDC) and start piloting as early as late 2021, the monetary regulator’s Deputy Chairman, Alexey Zabotkin, revealed.

While speaking at an online event hosted by the Russian Economic School, Zabotkin said that the central bank is planning to complete the prototype development by the year-end or next year, local news agency Prime reported.

The prototype will allow people to test the digital version of the ruble, but it will not allow real-time transactions.

“Next year, based on this prototype, we will consider further developments and thereafter launch testing rounds,” Zabotkin said (translated from Russian).

The Russian central bank first announced its plans to launch a digital currency in mid-October last year. The official consultation paper then described the digital ruble as an “additional form of money alongside cash and non-cash.”

Banks Warned against the CBDC Model

However, the project faced a setback as in January 2021 the association of Russian banks and Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term companies pointed out the drawbacks of the model of such Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term-based fiat and raised concerns over its use by the fraudsters.

Still, 83 percent of the respondents on the consultation paper supported the Russian central bank’s initiative to launch a CBDC, according to Coindesk.

Olga Skorobogatova, the Bank of Russia's first Deputy Governor, confirmed last month that the monetary regulator will proceed with its proposed model to develop a concept of the digital ruble.

Meanwhile, the lenders of the country are gearing up to launch digital currencies. Sberbank, Russia’s largest state-owned bank, is seeking approval to launch a blockchain-based platform that will allow the bank to launch its own digital currency.