Investing

Russia Postpones CBDC Pilot, Waiting for Legislation to Pass

Tim Fries

Published: March 29, 2023 10:19 pm

Russia’s central bank digital currency (CBDC) pilot rollout, initially scheduled for April 1, has been delayed as the country’s central bank awaits approval for a specific law. The legislation on CBDC could be approved by the Russian State Duma next month and come into effect in May, state-owned news agency TASS reported.

CBDC Legislation Could Come Into Force in May

According to a state-owned news outlet TASS, the launch of Russia’s digital ruble pilot has been delayed as the central bank waits for specific legislation to be approved by the Russian State Duma, the Federal Assembly’s lower house. The rollout of Russia’s CBDC, initially scheduled for April 1, is being postponed indefinitely.

State Duma member Anatoly Aksakov said the legislation on the CBDC could be approved in April and come into force in May, TASS reports. The number of private banks participating in the CBDC project in Russia has been reduced to 13 from 15.

Further, some employees at the banks and Ingosstrakh, one of the biggest insurance firms in the country, would help test CBDC for retail payments. Vitaly Kopysov, director of innovations at Sinara Bank, said Russian bank executives are excited about the digital ruble due to its potential to “reduce the operational load of banks and make the deals transparent.” As a result, the use of smart contracts would “not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts.”

Russia Accelerated CBDC Plans due to Western Sanctions

The postponement of the digital ruble pilot launch comes a month after the Bank of Russia announced the project. In the announcement, the bank said the pilot would include transactions with real customers, although the pilot currency would not be available to the general public.

If the pilot project succeeds, the fully-fledged digital ruble could be launched as early as 2024. Originally, Russia planned to launch the pilot project next year, but these plans have been accelerated amid the central bank’s pursuit of an alternative to the SWIFT payment system following severe sanctions against the country by the Western nations.

Several other countries have joined the CBDC race in recent months, including Japan, Brazil, and India, among others. China remains one of the leaders, advancing its digital yuan pilot programs for several years.

This article originally appeared on The Tokenist