The country’s central bank will begin investigating two possible cross-border CBDC settlement standards this quarter. Amid continuous sanctions imposed in retaliation for Russia’s invasion of Ukraine, Russia is ready to start creating a cross-border settlement system utilizing a central bank digital currency (CBDC).
According to a Jan. 9 article by local media source Kommersant, Russia’s central bank will explore two potential cross-border settlement solutions as part of its intentions to introduce the digital ruble in the first quarter of 2023.
According to the first suggested model, various nations would enter into unique bilateral agreements with Russia to integrate their CBDC systems.
Each agreement would be made to guarantee that the conversion and transfer of assets between the nations complied with its terms.
The second, more complex approach suggests creating a single hub-like platform for Russia to communicate with other nations, sharing common protocols and standards to make it easier for linked countries to send money to one another.
According to Roman Prokhorov, the executive director of the Financial Innovations Association (AFI), the original approach was easier to execute but less effective for cross-national contacts.
The alternative was considered to be more “advanced,” and he thought a two-way system could be implemented initially, with China being the most likely partner given its “technological and political readiness.”
According to reports from September, Russia intends to settle financial transactions with China using its digital ruble by the end of 2023.
Others, though, think politics, not technology, will constrain Russia’s CBDC participation.
According to Alexey Voylukov, vice president of the Association of Banks of Russia, the introduction of a digital ruble won’t alter or improve the political situation in the world for Russia, and trials for the CBDC platform can only be conducted with nations that are friendly toward the Russian government and have the necessary technological infrastructure.