Russia’s Central Bank Paves Way for Nationwide Adoption of CBDC by 2025
The Bank of Russia is contemplating 2025 to be the year when the digital ruble, the local central bank digital currency (CBDC), may see widespread adoption in the country. This move indicates the central bank’s strategic approach to modernizing the payment landscape in the nation.
Olga Skorobogatova, the first deputy governor of the Bank of Russia, emphasized that the digital ruble is viewed as an additional payment method alongside existing options like the Faster Payments System, Mir payment cards, QR code/NFC payments, biometrics-based payments, and cash.
Russia’s Ruble Will Coexist With Physical Cash
The introduction of Russia’s digital ruble raises questions about the potential for citizens to receive state payments exclusively through the central bank digital currency (CBDC). That would be similar to the Mir payment system, implemented in 2014 as a state-controlled card payment system to mitigate concerns about potential US and European sanctions.
The Bank of Russia has stated that the digital ruble will coexist with physical cash and is not intended to replace it. However, China, considered a strong ally of Russia, has already initiated payments to civil servants in Changshu using the digital yuan to promote the adoption of the state-controlled currency.
The Bank of Russia aims to establish agreements with China, India, and the UAE to connect their payment systems, enabling Russians to use the digital ruble for overseas transactions. Introducing the digital ruble is unlikely to significantly alter or improve Russia’s geopolitical situation. Additionally, Russian officials have acknowledged that CBDC trials can only be conducted with technologically capable and friendly nations.
Ruble Doesn’t Use Biometric Data
The Russian Central Bank earlier clarified that the digital ruble is unrelated to the state’s efforts to collect biometric data. The bank initiated CBDC trials in 11 cities across Russia approximately a month ago.
In contrast, Russian lawmakers passed a law in the previous year permitting banks and state agencies to collect biometric data from their clients, including facial scans and fingerprints. This initiative led to the development of the Unified Biometric System (UBS), intended to serve as a national digital remote identification platform utilized by the Kremlin and banks.
Unfortunately, these two separate projects have become intertwined in the eyes of some observers, leading to an increase in digital ruble and biometrics-related scams. Reports indicated that fraudsters contacted individuals in various regions, urging them to provide biometric data to convert their cash ruble savings into CBDC tokens.
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