Today Russia’s Ministry of Finance said it would participate in digital ruble pilots starting in 2024. Another report earlier this month claimed that pilots could commence before year’s end. Separately, State Duma lawmakers regret the central bank’s decision to pursue a retail central bank digital currency (CBDC) rather than a wholesale one.
Demand for a wholesale CBDC
Last week Interfax reported that lawmakers are pushing back on the central bank’s decision in 2021 to proceed with a retail digital currency rather than a wholesale CBDC. They’re keen to use a wholesale CBDC for cross border payments that sidesteps Western sanctions.
“The implemented model of the digital ruble is retail and is intended to expand the payment capabilities of the population and business. The committees note that some foreign countries are experimenting with the creation of another form of digital currencies intended for wholesale settlements between banks with a view to cross-border use,” read a statement of a State Duma committee, according to Interfax.
“A timely turn to its own experiment with a wholesale digital currency model would help the Russian Federation not miss out on the benefits of flexibility and adaptability that will be available as long as wholesale digital money projects of central banks around the world remain in the experimental phase.”
The lawmakers are keen to potentially use a wholesale CBDC within the Eurasian Economic Union (EAEU) and BRICS.
Project mBridge, a wholesale CBDC initiative for cross border CBDC, aims to launch a minimum viable product next year. BRICS – the economic cooperative including Brazil, Russia, India, China and South Africa – plans to expand to 11 jurisdictions. Two of the four current central banks participating in mBridge will be members of the expanded BRICS – China and the UAE. Additionally, Egypt and Saudi, both future BRICS members, are observing the mBridge tests.
Treasury retail CBDC pilots
Meanwhile, the Ministry’s announcement about Treasury CBDC pilots follows a meeting with the head of the Bank of Russia on Friday.
“These include certain social payments for citizens, some subsidies that are allocated for the purchase or provision of certain services,” said Anton Siluanov, Head of the Ministry, according to Interfax.
A report from Vedomosti earlier this month claimed that Siluanov said general digital ruble pilots would start this year.