The Bank of Russia is preparing for the possible extensive acceptance of the digital ruble by 2025, indicating a strategic step to update the country’s payment scenery. Olga Skorobogatova, the inaugural vice governor of the Bank of Russia, emphasized that the digital ruble is envisaged as an extra means of payment in conjunction with current alternatives.
Some options available are the Swift Payments System, Mir payment cards, payments using QR codes or NFC technology, prices based on biometrics, and physical currency. This advancement brings up inquiries regarding the potential for governmental transactions to be solely conducted via the central bank digital currency (CBDC), similar to the Mir payment system launched in 2014 to tackle worries about global penalties.
The Digital Ruble Will Not Threaten the National Currency
The topic of Russia’s central Bank digital currency (CBDC) has been a subject of interest and discussion. The focus has been on Russia’s plans and developments regarding the introduction of a digital
The Bank of Russia has explicitly stated that the digital ruble is not meant to supplant tangible currency but will instead exist alongside it. Russia’s dedication sets it apart from China. This powerful partner has already commenced disbursements to government employees utilizing the digital yuan to promote the acceptance of the government-regulated currency.
In addition to this, the Bank of Russia is enthusiastically exploring collaboration opportunities with China, India, and the UAE in order to connect the three countries’ respective payment systems. The primary objective of this endeavor is to empower individuals from Russia to utilize the electronic ruble for international dealings.
Nevertheless, it is crucial to highlight that implementing the digital ruble is not anticipated to modify Russia’s geopolitical circumstances substantially. Russian authorities have additionally recognized that carrying out trials for Central Bank Digital Currency (CBDC) necessitates collaboration with technologically proficient and amicable countries.
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To tackle mounting worries, the Russian Central Bank clarified that the digital ruble has no connection to the government’s endeavors to gather biometric information. Around one month ago, the Bank commenced Central Bank Digital Currency (CBDC) trials in approximately 11 cities throughout Russia.
Conversely, legislators in Russia approved legislation the prior year granting authorization to financial institutions and governmental organizations to gather biometric information from their customers, encompassing facial images and fingerprints. The implementation of this endeavor resulted in the creation of the Unified Biometric System (UBS), designed to function as a nationwide digital remote identification platform utilized by the Kremlin and financial institutions.
Fraud Is Thriving
Unfortunately, the digital ruble and projects related to biometrics have become entangled in the perspective of particular onlookers, leading to a surge in scams associated with the digital ruble and biometrics. Reports suggest that scammers have been reaching out to people in different areas, pressuring them to furnish their biometric information to transform their physical ruble savings into digital CBDC tokens.
As the Bank of Russia maps out the trajectory towards the possible extensive acceptance of the digital ruble by 2025, it underscores that this central bank digital currency (CBDC) will exist alongside current payment mechanisms and will not supplant tangible money.
Moreover, the Bank aims to forge global alliances to facilitate the utilization of the digital ruble for cross-border transactions. Despite apprehensions regarding the convergence of the digital ruble and biometric data endeavors, the Central Bank has elucidated that these undertakings are separate.
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