Russia launches digital ruble, hoping to circumvent international sanctions

Moscow thus hopes to limit the impact of international sanctions in the long term. Russia on Tuesday (August 15) launched the trial phase of a digital ruble based on blockchain technology. “VTB has become the first bank to successfully test transactions with digital rubles in its mobile application”welcomed in a statement the second largest bank in Russia.

Thirteen other banks and six hundred individuals are affected by this “trial stage”, detailed the Russian Central Bank (BCR). Initially, they will be able to make payments at thirty outlets located in eleven cities across the country.

Eventually, “operations will be free for citizens and with a minimum commission for businesses,” said the BCR. Moscow’s stated goal: to make its financial system more hermetic and limit the impact of international restrictions.

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Unlike cryptocurrencies, which also work on blockchain technology (which allows direct transactions from a decentralized ledger), the digital ruble is part of the CBDCs (central bank digital currency, “central bank digital currency”), which are largely controlled.

Democratization by 2027

The digital ruble is thus issued directly by the Russian Central Bank (BCR) and stored in electronic wallets. The Federal Security Service (FSB) oversees system security.

If authorities say they want a digital ruble to make payments more “safe”some observers believe on the contrary that the introduction of such a form of currency will above all allow the Russian government to control its citizens even more.

In the face of sanctions, Russia has been pushed to quickly develop alternatives to the Swift global payment system – from which its banks were largely banned after the launch of the Ukraine assault – while moving away from US dollars in its transactions. .

Russia thus becomes the 21ᵉ country in the world to enter the trial phase to launch a digital currency, according to the count of researchers from the Atlantic Council, at a time when many states have begun to reflect on the subject. Only eleven others, including Nigeria, have already introduced a CBDC.

Moscow hopes to extend the digital ruble to all Russians who want it “by 2025-2027”according to the explanations of the BCR to Agence France-Presse.

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The World with AFP

source site-29