After being kicked out of the SWIFT payment system by Western countries, Russia is looking for a way out. It plans to roll out the digital ruble to all banks and credit institutions by 2024.
Russia’s central bank recently published a paper setting out the direction of monetary policy for the next three years.
According to the document, one of the central bank’s priorities is to introduce a digital ruble in 2024.
It’s certainly a pivotal year for Russia, which will hold a presidential election in March 2024, and President Vladimir Putin has already signed a bill allowing him to stand down for two more terms, paving the way for him to stay in power until 2036.
The central bank began testing the digital ruble in February, and next year it will Beta test a digital ruble-based smart contract, with the goal of completing a trial of client-to-client trading, as well as client-to-business and business-to-customer settlement in 2024.
The central bank noted that it intends to unlock different experiments and features of the digital ruble from year to year, and once the Federal Finance Ministry is ready, the digital ruble will also cover consumer-to-government, business-to-government, government-to-consumer and government-to-business payments.
The central bank also expects to introduce an offline payment model for digital rubles in 2025, while integrating non-bank financial intermediaries, financial platforms and exchange infrastructure.
The central bank will also work with other central banks to develop the digital ruble so that cross-border and foreign exchange operations can be conducted using the central bank’s digital currency, the authorities added.
Russian lawmaker Anatoly Aksakov earlier revealed that Russia is working with China to accelerate the development of blockchain-related financial measures and central bank digital currencies, including the digital ruble and the digital yuan.
In May, Olga Skorobogatova, deputy governor of the Russian central bank, admitted that economic sanctions imposed by Western countries had been the main reason for the central bank to accelerate the development of the digital ruble.
In July, Russian President Vladimir Putin signed a decree that aims to ban people from using cryptocurrencies as payment and maintains that the ruble is the only official currency of the Russian federal government, although people can still invest and hold cryptocurrencies.