According to recent reports, Russia’s Central Bank will investigate two possible settlement alternatives between the nation and other countries. The move is part of its plans to proceed with the development of the digital Ruble in the first quarter of this year.
Russia’s central bank is developing a digital currency system, and the first model will allow individual countries to reach an agreement with Russia and help establish Russia’s central bank digital currency system. According to Russian officials, the first strategy is similar to the agreed procedures established with different countries.
According to the officials, the complexity of the second model will be very high. They stated that it involves the establishment of a particular platform that Russia will utilize to engage in dialogue with other nations.
The participating nations will agree to share their standards and protocols to facilitate the sending of transactions. The first model the Russian central bank developed to enable cross-border payment operations is seen as less desirable and more straightforward for bilateral transactions between one nation and another.
According to reports, China will likely be the first nation to form a partnership with Russia due to the country’s extensive advancement in technology.
A report released last year in September mentioned that by 2023, Russia plans to settle financial disagreements with China to enable the usage of the Russian digital Ruble.
Worries About The Russian CBDC As Sanctions Bite
International politics will likely be an obstacle to the launch of the Russian CBDC than the technology behind it. However, some analysts claim that Russia’s geopolitical situation won’t change or improve even if it introduces a digital Ruble.
Furthermore, the officials reported that tests of the CBDC platform could only be conducted with nations that are friendly to Russia and with high technological competence. Russia’s full-scale invasion of Ukraine in late February last year resulted in severe economic and financial sanctions on the country by other top economies.
These global sanctions prompted Russian authorities to investigate the use of cryptocurrencies as a payment option for international transactions.
In September, the Russian Ministry of Finance and the Bank of Russia agreed on a policy permitting Russian citizens to use cryptocurrencies like BTC and ETH when making international money transfers.