Russia is in the pilot phase of central bank digital currency development (CBDC), with new reports suggesting the country could use its national digital currency to stabilize global trade.
According to a report published in Reuters, Russia plans to jointly develop a digital ruble with China next year. Digital Ruble is currently being negotiated with banks and is expected to be completed early next year.
The US Treasury Department added 22 individuals and two Russian entities to its sanctions list in the third week of September. The country has been actively looking for alternative financial channels and business settlements as Western sanctions against Russia increase over the conflict with Ukraine.
Anatoly Aksakov, the head of the finance committee of the Russian lower parliament, recently admitted that the geo-political crisis has limited Russia’s access to international trade markets. That is why they have been actively working for alternative payment methods and trade settlements, and national digital currency seems to be the primary choice at the moment. he said,
“Western countries are imposing sanctions and creating problems with bank transfers, the subject of digital financial assets, including in international settlements, the digital ruble and cryptocurrencies are currently being strengthened in society.”
Russia joins a growing list of countries in the final stages of CBDC development. According to the Bank of Russia’s latest monetary policy reform, the authority will begin connecting all banks and credit institutions to the digital ruble platform by 2024.
Reports of the use of the digital ruble for joint trade settlements in the global trade market come within a week of reports suggesting the crypto will be used for cross-border payments.
Related: Crypto does not give Russia any way out of Western sanctions
Russia in 2010 In 2020, it adopted a crypto law that prohibits the use of cryptocurrencies as a form of payment. However, the law did not prohibit other crypto-specific activities such as mining and crypto trading.
Due to increasing sanctions and increasing uncertainty in the international trade market, Russia has turned to a national digital currency exchange to weaken the US dominance in the international trade market.