Russia to Allow Foreigners to Own and Use Digital Ruble -

Russia to Allow Foreigners to Own and Use Digital Ruble

The central bank of Russia intends to make the digital ruble convertible to foreign currency and available to non-residents. The regulator expressed concern over cryptocurrency risks in a document on the digitalization of Russia’s financial sector. He insists that digital currencies issued by the state are safer.

Bank of Russia will give foreigners access to its CBDC

The Central Bank of the Russian Federation will facilitate the exchange of digital rubles with foreign currencies. Users residing outside of its jurisdiction can also open and use digital ruble wallets. These intentions were revealed by the monetary authority in the recently published “Main Directions for Digitalization of the Financial Market 2022-2024” project.

Bank of Russia began to consider a central bank digital currency in 2018 and decided last year to investigate the possibility of issuing one. In October 2020, a consultation paper was released to solicit feedback from the financial sector. The regulator published a digital ruble concept in April 2021 that outlined its main architecture.

The CBR established a pilot group for digital rubles in June with more than a dozen banks, and other stakeholders. The authority plans to finish the prototype of the platform by December, and start trials with the CBDC in January. Forklog reported that the authority plans to expand the number of participants and types of transactions. RBC also reported the draft document.

Bank of Russia invites credit organizations to participate in the consumer-to-consumer stage of the trials, which will take place in 2022. Along with financial intermediaries like exchanges, brokers and marketplaces, non-bank payment service providers, exchanges and brokers, banks, and insurance companies, the Federal Treasury will be joining the second stage.

Smart contracts, offline mode and the possibility to convert digital rubles into other currencies will be available. CBR asserts that the offline use of the digital ruble will increase access to financial services for the general population. According to the CBR, uniform fees will lower transaction costs. It will also be used to make targeted payments to businesses and citizens.

The Russian central bank once more draws attention to the dangers that decentralized digital currencies such as bitcoin pose. CBR reiterates its belief that cryptocurrency cannot be used to pay due to their volatility.

While acknowledging that there are many approaches to regulation, Bank of Russia highlights a trend towards tightening rules in the crypto space. Bank of Russia insists that CBDCs are able to respond to the demand for digital payments.