Russia’s central bank considers limiting future transactions with a digital ruble to smooth the implementation effect of its 2023 plan, Deputy Governor Alexei Jabotkin said on Thursday.
Russia is working to introduce the digital ruble on top of existing cash and non-cash rubles, to facilitate payments for individuals and businesses, and to make the use of its currency more global despite Western restrictions.
“Cryptocurrency withdrawal will be similar to cash withdrawal,” Zbotkin said.
“It will be possible to impose limitations on transactions ranging from non-cash forms to digital rubles,” Zbotkin said, adding that the central bank would be prepared to compensate for the liquidity crunch when introducing the digital ruble.
Russia is joining other central banks worldwide to modernize financial systems, accelerate payments, and develop digital currencies to counter the potential threat of other cryptocurrencies.
Here are the key aspects of Russia’s digital ruble project:
* The central bank first introduced the idea of the digital ruble in October, citing the need to make payments more convenient;
* The digital ruble will be issued by the central bank and will not take the place of circulation in banks or cash in accounts;
* The first test drive phase is planned for 2022 and will involve transactions with banks. Other processes, such as tax payment and budget settlement, will be examined later;
* Russia is leaning towards a two-tier system for its digital ruble, with banks opening up digital wallets with the central bank and providing services as intermediaries for customers and companies;
* Russian banks have expressed concern about the digital ruble, pointing to cyber risks, potential liquidity shortages, and the loss of their profits;
* Russia legalizes cryptocurrencies such as Bitcoin, 2020. But it banned them from being used as a means of payment, emphasizing that only currencies issued by central banks could be used for this purpose;
* Russia sometimes monitors the digital ruble’s introduction when major central banks, including the US Federal Reserve, worked with the Bank for International Settlements (BIS) to locate the central bank’s digital currencies.