Russia is in the pilot phase of its central bank digital currency development (CBDC), and new reports suggest that the country may be able to settle international trade using its national digital currency, Cointelegraph informed.
According to a Reuters story, Russia intends to use the digital rouble for mutual settlements with China by next year. The digital rouble is being tested for bank settlement and is scheduled to be finished early next year.
In the third week of September, the US Treasury Department added 22 individuals and two Russian-based businesses to the sanction list. With the West’s increasing sanctions against Russia in the aftermath of the protracted conflict with Ukraine, the country has been actively seeking other financial and trade routes, Coitelegraph noted.
Anatooly Aksakov, head of the finance committee in Russia’s lower house of parliament stated that due to the geo-political crisis, the country’s accesibility to the global trade market has been affected. They are working for alternate modes of payment and trade settlements.
“The topic of digital financial assets, the digital rouble and cryptocurrencies are currently intensifying in society, as Western countries are imposing sanction and creating problems for bank transfers, including in international settlements.”
Russia has joined the expanding list of countries nearing the end of the CBDC development process. According to the latest monetary policy statement from the Bank of Russia, the central bank will begin connecting all banks and credit institutions to the digital rouble network in 2024. The usage of the digital rouble for mutual trade settlements in the international trade market follows stories that hinted at prospective crypto use for cross-border payments just a week ago, Cointelegraph noted.
In 2020, Russia passed a crypto law that outlawed the use of cryptocurrencies as a form of payment. Other crypto-related activities, like as mining and crypto trading, were not prohibited by the law. With the growth of sanctions and increasing uncertainty in the international trade market, Russia has turned to its national digital currency as a medium of exchange to challenge the United States’ dominance.
(With insights from Cointelegraph)