Russia Central Bank and Digital Currency: Wholesale CBDC Interest Grows
As Russia launches the retail version of its central bank digital currency (CBDC) pilot, lawmakers are turning their attention to a wholesale digital ruble. The move comes as economic sanctions take an increasing toll on the country.
Growing Interest in Wholesale CBDC
According to a report by local news outlet Interfax, Russian deputies at the State Duma are advocating for wholesale CBDC pilots to be conducted alongside retail experiments. The legislators argue that such a move would enhance the state of payments and allow Russia to benefit from the flexibility and adaptability offered by wholesale digital money projects.
Economic Sanctions as a Catalyst
The lawmakers are particularly concerned about economic sanctions imposed on Russia. These sanctions, which resulted in the blacklisting of Russian banks from the SWIFT network, have had a significant impact on the country’s GDP. As a response, the lawmakers believe that developing a wholesale CBDC would provide Russian financial institutions with alternatives to Western-backed infrastructure for cross-border transactions.
Plans for Wholesale CBDC Deployment
Currently, plans are underway for deploying wholesale CBDCs in various economic blocs, including the BRICS and the Eurasian Economic Union (EAEU).
Potential Uses for Wholesale CBDC
Back in 2021, when discussions around a digital ruble were first emerging, there was a strong focus on a wholesale offering. However, the prioritization of the retail version was largely driven by the government’s concerns about the “cryptoization” of the local economy. Despite this, the Finance Ministry has expressed interest in participating in the digital ruble pilot and is examining use cases for social payments and subsidies for citizens.
Programmable CBDCs on the Horizon
Chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, has hinted at the possibility of incorporating programmable functionalities into the digital ruble using smart contracts. While acknowledging the risks involved, Aksakov emphasized the potential benefits such as curbing money laundering and terrorism financing.
Looking to the Future
As Russia continues to explore the potential of wholesale CBDCs, there is a growing focus on the programmable features that could be added to the digital ruble. The interest in wholesale CBDCs is driven by a desire to circumvent economic sanctions and gain more control over cross-border transactions.
### News source: coingeek.com