Russia to create digital ruble prototype by December

Digital ruble consultation paper cover
PROTOTYPE: Russia plans to use a two-tier retail model for its proposed central bank digital currency

The Central Bank of Russia will build a prototype central bank digital currency (CBDC) by December 2021 using a two-tier structural model unveiled by bank representatives at a press conference.

The announcement comes after the publication of a consultation paper on the possible introduction of a digital ruble that outlines the key stages of the implementation process and the results of research with stakeholders and market participants.

“The selected target model is a two-tier retail model which assumes that the Bank of Russia is both the issuer of digital rubles and the operator of the digital ruble platform,” the bank says.

“At the same time, financial institutions open electronic wallets for their clients and perform operations over these wallets on the digital ruble platform.

“Households and businesses will be able to access their digital rubles through any bank where they are serviced.

“The selected model will make it possible to use the benefits of the existing two-tier financial system and enable the interaction between clients and the digital ruble platform through financial institutions’ mobile applications.”

“Other regulators’ research and pilot tests of central bank digital currencies demonstrate that a two-tier retail model is the most preferable in terms of both innovations and stability in the financial market,” the bank adds.

“The introduction of a digital ruble will help reduce costs for households and businesses, increase the speed of payments, and develop innovative products and services in the financial industry and the economy in general.”

The Bank of Russia launched its public consultation about a digital ruble in October 2020.

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