Russia allows foreign residents to own and use digital rubles – Finance

The Russian central bank wants to ensure that the digital ruble is convertible into foreign currencies and can be used by non-residents. In a document on the digitalization of Russia's financial sector, the regulator reiterates its concerns about the risks associated with cryptocurrencies and insists that state-issued digital currencies are safer.

Bank of Russia gives foreigners access to its CBDC

The Central Bank of the Russian Federation (CBR) will facilitate the exchange of the digital ruble for foreign currencies and allow users residing outside its jurisdiction to open and use digital ruble wallets. The monetary authority disclosed these intentions in its project “Main directions for the digitalization of the financial market 2022 – 2024”. published recently.

The Bank of Russia began thinking about a central bank digital currency ( CBDC ) in 2018 and decided last year to explore the possibility of issuing it. A consultation paper was published in October 2020 to collect feedback from financial sector players. In April 2021, the regulator published a concept for the digital ruble, outlining the main architecture.

In June, the CBR formed a digital ruble pilot group with over a dozen banks and other stakeholders. The authority wants to complete the prototype of the platform by the end of December and begin testing the CBDC in January. It is planned to gradually expand the circle of participants and the type of transactions, Forklog and RBC reported, citing the draft document.

In the first phase of trials in 2022, the Bank of Russia will invite credit organizations and conduct consumer-to-consumer transactions. In the second stage, the Federal Treasury as well as financial intermediaries such as non-bank payment service providers, stock exchanges, brokers, marketplaces and insurance companies will be added.

Smart contracts and offline mode, as well as the ability to convert digital rubles into foreign currency, will also be introduced. The CBR claims that offline use of the digital ruble will increase the availability of financial services to the population. It says that uniform Fees reduces transaction costs. The platform is also used for targeted payments to citizens and companies.

In the document, the Russian central bank has once again drawn attention to the risks it sees in decentralized digital currencies such as Bitcoin. The CBR reiterates its position that cryptocurrencies cannot be used as a means of payment due to their high volatility.

Given the different regulatory approaches, the bank nevertheless points to a trend towards tightening regulations in the crypto space. The Bank of Russia also insists that CBDCs can respond to the need for secure digital payments.

What do you think of Russia's plans for the digital ruble project? Tell us in the comments section below.

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