Amid new sanctions imposed by the European Union and the United States, Russia is pushing ahead with its central bank digital currency (CBDC) project.
According to the Russian government, the country will have a “digital ruble” by next year. According to the authorities, the Russian digital currency will allow the country to make international payments.
At the same time, Russia wants to expand the number of countries that accept its central bank-administered bank cards.
The initiatives are the alternative that Moscow has found to be able to make important payments, while Western sanctions cut the country off from much of the global financial system.
Amid new sanctions Russia advances with CBDC
As reported by Reuters on Friday (22), the president of the country’s central bank, Elvira Nabiullina, said that the Russian monetary authority plans to use the digital ruble from 2023 in some international agreements.
“The digital ruble is among the priority projects,” she told Russia’s Lower House of Parliament. “We quickly created a prototype. We are now conducting tests with banks and next year we will gradually have pilot transactions.”
Russia is just one of many countries testing or planning to launch a national CBDC.
The first nation in the world to have a national digital currency was the Bahamas. Meanwhile, among the world’s largest economies, China is the most advanced in this regard. The country is already testing the “digital yuan”.
In Brazil, the promise is that the real digital pilot will be launched in the second half of this year.
International payments with Russian card
Another point addressed by Nabiullina in her speech to the Lower House was the expansion of the number of countries that accept MIR bank cards from the central bank. MIR is an alternative to Visa and Mastercard cards.
In the current scenario, MIR and UnionPay are among the few options left for Russians to make payments abroad.
Since Russian troops invaded Ukraine on February 24, the West has imposed several sanctions on Moscow. The most recent date from last Wednesday (20).
The US, for example, has sanctioned Russian BTC mining company BitRiver. As a result, the company will not be able to operate in the US, as well as do business with US companies.
In addition, Binance announced last Thursday (21) that it will limit its services to people and companies based in Russia.
Russian citizens or individuals residing in Russia, or legal entities established in Russia, who have crypto assets exceeding the value of EUR 10,000 will have to prove their addresses.
These accounts will be placed in withdrawal-only mode. That is, no deposits or trading will be allowed.