Russia will start to work on CBDC in Q1 2023

Russian government agencies disclosed their plans for national CBDC, which will be based upon two models. 

The Central Bank Digital Currency (CBDC) is a concept, which was developed by the Central Banks after the popularity of the Stablecoins in the Crypto sector. In the present time, the majority of the Central Banks in this world are working to bring advancement in the existing digital banking services with the help of CBDC implementation.

On 9 Jan 2023, Russian local media outlet Kommersant reported that the Bank of Russia, the Central Bank authority of the country, planned to start the development work on the national CBDC somewhere in the first quarter of this year (Q1 2023). 

The report noted that the Central Bank already did work on this thing as a part of the CBDC development study and planned to introduce two models of the CBDC payment system. 

In the first CBDC model, Russia expects to see the involvement of multiple countries in separate bilateral agreements with Russia to integrate their CBDC systems. 

The second CBDC model of the Russian CBDC system will be highly complicated for the other countries, in which the CBDC system will act like a single hub-like platform for Russia to interact with other nations, sharing common protocols and standards to facilitate payments between the connected countries.

The Financial Innovations Association (AFI) head Roman Prokhorov noted that the first Russian CBDC model is simple but there are chances of the occurrence of some bilateral interactions between countries. But another system seems promising, where China-like countries will be able to easily partner with Russia in the settlement. 

Earlier this, the vice president of the Association of Banks of Russia, Alexey Voylukov, shared his opinion on the Russian Ruble, or say Russian CBDC, and said that it will only help Russia-friendly countries to easily trade without any financial restrictions. 

So far to this date, only a few countries have developed their CBDC e.g China launched Digital Yuan, and Nigeria launched e-Naira. These countries noted that CBDC-based payment system adoption was very low over the last one year of the time frame. In particular, the e-Naira adoption in Nigeria was 0.5% of the country’s whole population, which was unexpected by the Central Bank of Nigeria (CBN). 

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