The Delayed Launch of the Russian CBDC Pilot: An Overview

03/29/2023 08:26 • Daily Digest • 101 views

It is reported that due to the legislative process, the Russian CBDC pilot will not start on April 1, and the legislation may be finally promulgated in early May. The number of private banks participating in the pilot has also changed from 15 to 13. It is understood that staff from some of these banks will become test participants in CBDC retail payments, as well as Ingosstrakh, one of the country’s largest insurance companies.

Due to the legislative process, Russia postponed the start test time of CBDC

The Russian Central Bank was supposed to launch its CBDC pilot on April 1, but due to certain legislative procedures, the launch has been delayed. The legislation may be finally promulgated in early May. Moreover, the number of private banks participating in the pilot has also changed from 15 to 13. Despite these changes, the Russian CBDC continues to generate interest among finance professionals and experts alike. This article aims to provide an overview of the Russian CBDC pilot and the factors behind its delayed launch.

What is a CBDC?

A Central Bank Digital Currency (CBDC) is a digital version of fiat currency, issued and controlled by a country’s central bank. Unlike cryptocurrencies, CBDCs are backed by a government or institution, have a stable value, and are considered legal tender.

The Russian CBDC Pilot

The Russian CBDC pilot was supposed to launch on April 1, 2021. The initial plan was for 15 private banks to participate in the pilot. However, due to various reasons, the launch has been postponed to early May, and the number of participating banks has been reduced to 13. The pilot will test the CBDC’s feasibility as a payment method, both in retail and wholesale environments.

The Legislative Process

The delay in the launch of the Russian CBDC pilot is due to the country’s legislative process. The Russian parliament needs to pass a bill regulating the issuance and circulation of CBDCs before the central bank can launch its pilot. The bill has been under consideration for some time, and experts suggest that there may be certain disagreements within the government regarding the regulation of CBDCs.

The Role of Private Banks

Participating private banks will play a crucial role in the Russian CBDC pilot. The staff of these banks will become test participants in CBDC retail payments. The involvement of private banks will provide a real-world testing ground for the CBDC and allow the central bank to understand the practical implications of its pilot.

Ingosstrakh’s Involvement

One of the country’s largest insurance companies, Ingosstrakh, will participate in the pilot. The involvement of a non-financial entity such as an insurance company shows the potential use cases of the CBDC in various sectors beyond finance.

Conclusion

The Russian CBDC pilot has generated a lot of interest among experts and professionals. However, due to the legislative process, the launch of the pilot has been delayed until early May. Despite the delay, the involvement of private banks and non-financial entities such as Ingosstrakh shows the potential of the Russian CBDC pilot.

FAQs

#Q1. What is the Russian CBDC?

A1. The Russian CBDC is a digital version of fiat currency issued and controlled by the country’s central bank.

#Q2. Why has the launch of the Russian CBDC pilot been delayed?

A2. The launch of the Russian CBDC pilot has been delayed due to the country’s legislative process.

#Q3. Which private banks are participating in the Russian CBDC pilot?

A3. Initially, 15 private banks were supposed to participate in the Russian CBDC pilot. However, the number has been reduced to 13.

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