- More governments are now looking the way of digital currencies, with Russia finalizing its plans to launch testing.
- Elvira Nabuillina, head of the Russian Central Bank has revealed that trials for the digital Ruble will commence in 2022.
- Plans for the digital currency started in 2017 when President Vladimir Putin expressed that his country will launch a state-sponsored cryptocurrency.
- The Ruble will follow the Digital Yuan by China, the Sand Dollar by the Bahamas, and others from Japan, UK, and France which are being developed.
Russia recently moved up its plans to commence testing for its digital currency. Testing for the digital Ruble will commence in 2022 from the initial scheduled date of 2021. President Vladimir Putin revealed plans for Russia to launch its digital currency back in 2017 with live transactions expected to commence in 2022 after being tested in 2021.
The Head of Russia’s Central Bank, Elvira Nabuillina has revealed the new date alongside many banks like the Credit Bank of Moscow, Crimea’s Russian National Commercial Bank, etc. The world is looking expectantly towards Russia.
Digital Ruble
Digital Currencies (CBDC) are state-backed digital assets that are regulated by the government. The digital Ruble is the digital currency of Russia which is set to launch next year. As expected, its value is going to be the same as the normal Ruble i.e. one digital Ruble can be exchanged with 1 Ruble.
President Vladimir Putin, like some other world leaders, wasn’t an initial supporter of bitcoin and other decentralized cryptocurrencies. In October 2017, he stated that cryptocurrencies were used mainly by fraudsters to commit crimes which is bad for the country.
The digital Ruble on the other hand is a regulated digital asset that is state-backed and profitable for the Russian government. The digital Ruble will yield an additional 13% tax revenue to Russia unlike other coins like Bitcoin and Ether. As the currency will be issued by the Russian government, there will be no mining activity. Digital currency will help increase competition among banks while reducing transaction fees.
On the Flipside
- The digital Ruble is going to be a centralized currency so expectations that President Putin has backed blockchain technology haven’t resulted in a decentralized currency.
- The Digital Ruble may have high hopes with Russian support but it may not be able to compete with the digital Yuan of China.
The Future of the Digital Ruble and Other CBDCs
As testing of the currency begins in 2022, citizens and investors are itching to see what the digital Ruble brings with it. As a centralized currency, it’s going to be properly regulated and issued by the government, an advantage for people who don’t like the decentralized nature of cryptocurrencies.
It is possible that one of Putin’s aims of embracing blockchain technology is due to the discrete nature of transferring money without worrying about sanctions placed by the international community.
The Russian government is hopeful that a digital Ruble will help reduce the influence of cryptos and push CBDC forward. An influential country like Russia launching its digital currency will make the Central Banks of other nations release their digital assets.
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