Russia’s Digital Ruble: What’s Next For Foreign Trade and Pensions?

• The Russian digital ruble pilot launch was delayed until at least May, but the government still hopes to kick off the currency in 2024.
• The Bank of Russia first announced its plans to explore the possibility of issuing a CBDC in 2017, with a roll-out planned for 2024.
• Cross-border settlements between BRICS countries and inclusion in the pension system are potential applications for the digital ruble.

Russia’s Digital Ruble Project

The Russian government is aiming to launch its own Central Bank Digital Currency (CBDC), called the digital ruble, by 2024. The project has faced delays due to slow progress on associated legislation, but a pilot launch could take place as early as May 2021.

Background on CBDC Development

In 2017, Bank of Russia First Deputy Governor Olga Skorobogatova stated that exploring a CBDC would be a priority for the bank and that they would look into it soon. However, Governor Elvira Nabiullina held off on calling it a top priority and instead described it as something more long term.

2024 Roll-Out Plan

In 2022, the Bank of Russia announced plans for a full roll-out of the digital ruble across all banks by 2024. They noted that this implementation would take place in stages and involve extensive testing and infrastructure development before going live. It was also suggested that this new form of currency would coexist with cash and other non-cash payment systems to provide consumers with more options when making payments.

Cross Border Settlements & Pension System Inclusion

The need for reliable cross border payments solutions following sanctions imposed after Russia’s invasion of Ukraine accelerated development on the project even further. By early 2023, local media reported that two possible cross-border settlement models were under study by Bank Of Russia which could include use of their digital currency solution alongside other BRICS countries (Brazil, Russia, India, China and South Africa). Additionally there is intent to include this system within existing state controlled pension systems too.

Conclusion

While there have been delays so far in launching this project due to legislative obstacles, these should soon be resolved allowing us to see how successful or otherwise this CBDC based solution will be when rolled out nationally across all banking providers in 2024 as intended initially back in 2017 by those leading on its development at Bank Of Russia itself .