According to central bank governor Elvira Nabiullina, the Bank of Russia is delaying the release of the digital ruble, which was scheduled for this summer but will be delayed until an undetermined future date. “We continue to receive questions about delays in the widespread introduction of the digital ruble”, Nabiullina said. She explained that pilot testing has been successful, with 1,700 people, 15 banks, and 30 companies participating. However, she concedes that more consultation must occur with banks to find the best economic model to fit with customers before a rollout can occur. The Bank of Russia started this project because banks showed a keen interest in smart contracts, providing an apparent reason to make smart contracts a central component of the Central Bank Digital Currency project. Nabiullina announced the delay to the Association of Russian Banks (ASROS) and updated the attendees on the positive results achieved thus far with the pilot test. “Therefore, our intention”, said Nabiullina, “is to move to the mass introduction of the digital ruble a little later than originally planned, namely after we work out all the details in the pilot and consult with banks on the economic model, which is most attractive to their customers – for business, for people”. The digital ruble was designed to be a fully functioning Central Bank Digital Currency (CBDC), operating alongside cash and digital payments, providing reliable services without the need for interest or lending rates. The Banking Association estimated that a bank’s adoption of the digital currency would cost $1.1 million. The central bank will provide extra support for smaller banks, including free technical support. “For those components that are mandatory”, wrote Deputy Governor of the Bank of Russia, Zulfiya Kakhrumanova, “from the point of view of information security, we provide these solutions to banks free of charge. This software module for embedding is created and transferred to organizations, and in three different forms, so that banks can choose the most optimal one for their landscape”. “We provide free cryptographic information protection tools for subordinate certification centers deployed by banks, and this is also a significant cost aspect for banks”. The digital ruble further allows Russia to make international payments, relying less on Western infrastructure. It provides an alternative to the SWIFT payment system, allowing Russia and other countries to continue operating businesses regardless of Western sanctions. Given Russia’s high priority for SWIFT alternatives and BRICS business, one can only wonder why the digital ruble has been postponed. The proliferation of CBDCs would allow for bypassing the SWIFT international standard, displacing the dollar as an accepted medium of exchange. Currently, SWIFT is used to sanction entire states, having very little competition. The economic alliance of Brazil , Russia , India , China , and South Africa (BRICS), including Egypt, Iran, Indonesia, and Ethiopia, with additional right partner countries, has sought more reliable forms of payment that do not overly rely on American-dominated standards. BRICS has created a BRICS Pay Consortium, using QR codes to organise payments. The system is referred to as a decentralized automated organization (DAO). Although the system is not explicitly a blockchain, the consortium has been upfront about its intentions to explore blockchain solutions. Olga Goncharova, a financial consultant, claims that a digital central bank is not appropriate because digital currencies are programmable and have security concerns. She further says consumers may not prefer a digital currency, limiting its ability to roll out across Russia. Goncharova concedes that smart contracts could speed up loan processing and limit government spending, but she argues that these processes could be completed with traditional means.
