In spite of participating banks showing readiness, Russia has postponed the rollout of its central bank digital currency (CBDC). The country had scheduled 1 April for the rollout, but reports from a local media outlet on Tuesday says the event is not feasible.
The report further stated that the postponement was necessary since specific legislation has only past through the first reading at the Russian senate. If all goes well, the legislation is expected to be enacted by early May.
Russia had in February this year announced plans to pilot a digital Ruble. The pilot was intended to test the use of the CBDC for transactions between individuals and for retail payments. It was initially scheduled for 2024, but the government decided to do it earlier.
Number of Participating Banks Reduced
The pilot will involve the use of selected banks to test the use of the CBDC. The number of selected banks was initially 15, but it has been reduced to 13. No reason has been given for the decision to reduce the number of banks so far, but it could have something to do with ensuring the effective implementation of the project.
The pilot will use some employees of the participating banks as subjects to test the use of the digital Ruble for retail payments. One of the country’s largest insurance companies, Ingosstrakh will also be participating in the test.
Although consumers and operations will be involved in the test, this will be limited as this is the first stage. A second stage is expected, during which time the Bank of Russia will increase the scale of the test, probably to the general public.
Participating Banks Show Enthusiasm
Banks selected for the CBDC pilot have shown great enthusiasm as expressed by some of their executives. The director of innovations at one of the banks, Sinara Bank, Vitaly Kopysov, says CBDCs will bring transparency.
“The use of smart contracts should reduce the operational load of banks and make the deals transparent, which not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts,” he said while briefing the media.
Other countries such as China have reached advanced stages with their CBDC developments, with local banks and even citizens showing massive support for the project. Crypto supporters however think otherwise, and would rather use public blockchains for transactions.
This may be why the eNaira in Nigeria is having a hard time winning the hearts of the people. It has scarcely been used, and the country ranks as one of the top in cryptocurrency use in the world. However, many more countries seem to be considering the idea of CBDCs which they claim will bring sanity to their monetary systems.