The Bank of Russia Plans for Widespread Adoption of Digital Ruble by 2025
The Bank of Russia is considering 2025 as the target year for the widespread adoption of the digital ruble, the country’s central bank digital currency (CBDC). This move reflects the central bank’s strategic approach to modernizing the payment landscape in Russia. According to Olga Skorobogatova, the first deputy governor of the Bank of Russia, the digital ruble will be an additional payment method alongside existing options such as the Faster Payments System, Mir payment cards, QR code/NFC payments, biometrics-based payments, and cash.
Russia’s Digital Ruble and Physical Cash Will Coexist
The introduction of Russia’s digital ruble raises questions about whether citizens will receive state payments exclusively through the CBDC. However, the Bank of Russia has stated that the digital ruble will coexist with physical cash and is not intended to replace it. This is similar to Russia’s Mir payment system, which was implemented in 2014 as a state-controlled card payment system to address concerns about potential sanctions.
China has already started making payments to civil servants using the digital yuan to promote adoption of its state-controlled currency. The Bank of Russia aims to establish agreements with China, India, and the UAE to connect their payment systems, allowing Russians to use the digital ruble for overseas transactions. It is important to note that introducing the digital ruble is unlikely to have a significant impact on Russia’s geopolitical situation, and CBDC trials can only be conducted with technologically capable and friendly nations.
Digital Ruble Unrelated to Biometric Data Collection
The Russian Central Bank has clarified that the digital ruble is separate from the state’s efforts to collect biometric data. The bank recently initiated CBDC trials in 11 cities across Russia. In contrast, Russian lawmakers passed a law last year allowing banks and state agencies to collect biometric data from their clients, leading to the development of the Unified Biometric System (UBS). Unfortunately, these two projects have become intertwined in the eyes of some observers, resulting in an increase in digital ruble and biometrics-related scams.
Hot Take: The Future of Digital Ruble Adoption in Russia
The Bank of Russia’s plans for widespread adoption of the digital ruble by 2025 signify a strategic move towards modernizing the payment landscape in the country. By introducing the digital ruble as an additional payment method alongside existing options, the central bank aims to provide more convenience and flexibility to users. However, it is important to note that the digital ruble will coexist with physical cash and is not intended to replace it. While there are potential opportunities for international partnerships and collaborations, the introduction of the digital ruble is unlikely to significantly impact Russia’s geopolitical situation. It is crucial for individuals to stay vigilant against scams related to digital ruble and biometric data collection.
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