Russian financial authorities have confirmed the government’s purported plans to issue the central bank digital currency, or CBDC.

On Oct. 13, the Bank of Russia released a consultation paper on the development of the digital Russian ruble. 

In the statement, the central bank said that the digital ruble can become an “additional form of money alongside cash and non-cash.” The establishment of Russia’s CBDC project will require the creation of additional payment infrastructure, the bank said.

The bank also said that the digital ruble will have “all the necessary properties to perform the functions of money.” The project’s timing will be determined by the authorities in the near future, the bank noted.

According to the paper, the digital ruble is designed to make payments “faster, more simple and secure.” The bank also noted that a CBDC like the digital ruble will reduce the risk of capital outflow, stating:

The national digital currency will also limit the risk of reallocation of funds into foreign digital currencies, contributing to macroeconomic and financial stability.”

According to the bank, users will be able to access the digital ruble on their e-wallets and mobile devices, and will be available for use both online and offline. “Thus, the digital ruble will supplement the monetary circulation and will be used simultaneously with cash rubles and funds of the population and enterprises in accounts with commercial banks,” the bank said.

The digital ruble will be available for “all the agents in the economy” like citizens, businesses, financial market participants, as well as the government. The bank added that the digital ruble will have three functions of money including a store of value, a unit of account and a medium of exchange. 

The Bank of Russia’s consultation paper demonstrates that the country is serious about issuing its own digital currency. Russian government previously discussed the opportunity of issuing the so-called “CryptoRuble,” but the latest paper from the central bank is apparently the first serious move into CBDC development. In August 2020, Russia’s state-owned bank Sberbank also claimed that it was considering issuing a ruble-backed stablecoin.

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