The central bank has announced the start of testing the digital rouble. What will the new currency be like?
The Central Bank has begun testing the digital rouble amid increased attention from Russian officials to regulate the crypto industry. The Central Bank earlier insisted on a complete ban on cryptocurrencies in the country, but later reached an agreement with the Ministry of Finance, where such measures were deemed too radical. Now, the Bank of Russia reports on the launch of the test phase for the domestic version of CBDC. We tell you more about it.
The story with the digital rouble has been dragging on for quite some time. In particular, representatives of the main bank of the country predicted the beginning of testing of the digital version of the national currency of the Russian Federation in October 2020, and made a stake on the end of 2021. As you can see, the forecast did not come true, although the deviation was relatively small.
Other countries are also working in this direction. The day before we learned that the European Central Bank plans to create the first version of the digital euro by the end of 2023. At the same time, the corresponding regulation should appear at the beginning of 2023. Read more about this in a separate article.
When will the digital ruble appear?
12 Russian banks are participating in the pilot programme of digital rouble, and 3 of them have already carried out the first transactions with CBDC. Information about what is happening has been published by Cointelegraph news platform, with the report initially appearing on the official website of the Central Bank.
By today, the two banks have carried out a full cycle of digital rouble transfers between customers. It is worth noting that these transactions were made through official banking applications. Moreover, transactions were carried out to exchange non-cash roubles into digital roubles. The remaining banks will complete the full cycle of such transactions as the platform is finalised.
Banks in the digital rouble testing group
The system of interaction of citizens with the digital rouble will be built on two levels. First, the Central Bank is the sole issuer and operator of the digital rouble platform. Both ordinary citizens and organisations will be able to use CBDC. The uniqueness of the digital rouble in this context is that it must be supported by any banking application. In addition, it is likely that the platform will be available to customers of any Russian bank at the stage of its official release.
Scheme of the digital ruble
Additional features in the Central Bank’s developers’ plans include the ability to make transactions even without an internet connection, the potential integration of smart contracts and payments between non-residents of Russia. Unfortunately, however, the CBR’s top management has not yet reached a consensus on Bitcoin and altcoins. For example, this is what Elvira Nabiullina, head of the Central Bank of Russia, said about it.
We will make every effort to persuade the government and further elaborate on our arguments, because we see significant risks in the crypto industry here. I am counting on common sense, so we do not have a “plan B” yet.
Central Bank Governor Elvira Nabiullina
Meanwhile, the Ministry of Economic Development has given the green light to the concept of regulating cryptocurrency mining in the country. It is supposed to allow this type of activity in certain regions where there is a “significant overproduction of electricity”. The proposal proposed introducing lower tariffs for setting up mining farms and data centres in certain regions of Russia, as well as offering reduced electricity tariffs for such facilities.
The ministry also wants to set a cap on energy consumption for mining by individuals, suggesting that higher electricity tariffs should be introduced. The report notes that the authorities have not yet determined a threshold amount for this. At the same time, according to the ministry, the proposed new rules would reduce the risks of insufficient power supply to housing, social facilities and infrastructure in other parts of the country. In addition, officials have called for the recognition of cryptocurrency mining as a commercial activity and the introduction of taxes on realized profits in this area.
We believe that such ideas seem promising. Still, as Vladimir Putin said earlier, Russia does have certain advantages for cryptocurrency mining. Therefore, the regulation of the coin mining niche is a logical step. The main thing is that the mechanism of interaction with the authorities should be clear, and the infrastructure of revenue and other indicators should be reliable.
What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we will discuss other important news that affects what is happening with digital assets.
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