By Alicia Maher
Weeks after proposing a blanket ban on cryptocurrencies and mining activities, the Bank of Russia has finally commenced trials for its CBDC Digital Ruble. The BoR announced on Tuesday that the tests became of utmost importance following the completion of the digitized Ruble platform last December.
Speaking of its ambitious push to join world leaders and other countries in launching a CBDC, the BoR said it had received applications from 12 banks to partake in the various trial exercises. Three amongst the 12 linked their systems to the CBDC platform, and two others changed non-fiat to eRuble and transferred the funds to people. All the banks successfully opened a CBDC wallet.
Digital Ruble Will Open Up New Business Opportunities
Unlike cryptocurrencies that are uncontrolled, central banks worldwide deemed it fit to launch a CBDC to control the monetary market. CBDCs encompasses the benefits of using cryptocurrency in business while addressing the issues of volatility and illegal financial activities, which have become common in the crypto space.
Digitized currencies facilitate cross-border payments, meaning that people will no longer have to carry fiat around when traveling across states or continents. In addition, people will no longer have to be worried about bank delays, costs, and service interruption as CBDC payment is instant. Not only is this safe, but it’s also convenient.
While speaking of the benefits of rolling out a CBDC, BoR Executive Olga Skorobogatova stated that eRuble would create new business opportunities for its citizens and the state. According to the First Deputy Chairman, Russian citizens will do free transfers in digital Rubles within the country.
Olga said that Russia would receive a new software for specific payments and budget payments implementation. He added that the apex bank would refine the eRuble platform and “provide straightforward interaction with digital platforms and ecosystems” in subsequent developmental stages.
The State of Cryptocurrency Use Against CBDC Rollout
Last week, Russia considered stopping all PoW activities and cryptocurrency use to embrace digital Ruble use, a similar approach that China took when rolling out its CBDC e-CNY. However, the controversial plan didn’t follow through, as some members of the parliament and President Vladimir Putin objected to banning mining. In their opinion, crypto mining could bring lots of revenue to the country.
Unlike Russia, China altogether banned cryptocurrency, including mining, to boost the adoption of its digital Yuan. Recently, China debuted the long-awaited e-CNY at the ongoing Winter Olympics.
As Digital Ruble continues to develop, the chances are that the Bank of Russia may still go ahead with its crypto ban or introduce some regulations to reduce crypto use for Digital Ruble.