The Bank of Russia is currently running a pilot for its digital ruble with 12 banks and announced plans to start consumer pilots in April 2023 instead of 2024. It’s possible the central bank digital currency (CBDC) may become fully operational in 2023, but the central bank stated it’s more likely that it will have the launch roadmap by then.
It was also confirmed that the digital ruble could be an alternative to SWIFT. “This also solves the issue of disconnecting from SWIFT, because with such integration, SWIFT will no longer be needed,” said Olga Nikolaevna, First Deputy Governor of the Bank of Russia, talking to TASS.
There have been reports about integration with the digital yuan, which China has been piloting with consumers since October 2020. “Next year, more active work will begin on the interoperability of national currency platforms,” said the First Deputy Governor. She added, “then it will be clear with whom exactly this is possible.”
The Pilot was launched in June 2021, and one of the initial motivations was to address concerns over bank concentration. However, the recent SWIFT ban could explain their accelerated efforts. Additionally, Nikolaevna stated that the banks piloting the digital currency were at different speeds, with around half of them progressing rapidly, which explains how faster progress is viable. The central bank also believes that most’ self-respecting states’ will have digital currencies within three years.
Coming back to the cross border use of the digital ruble. If many countries sidestep SWIFT beyond sanctioned jurisdictions, cross border payments will become more fragmented. That will add complexity and costs. In addition, making the CBDCs interoperable may be a challenge.
However, many central banks worldwide are involved in trials of cross border payment initiatives or multi-CBDCs (M-CBDC). There is the M-CBDC Bridge initiative involving Hong Kong, Thailand, China, the UAE and the Bank for International Settlements (BIS). And Project Dunbar includes the BIS and the central banks of Singapore, Malaysia, South Africa and Australia.