In the midst of ongoing sanctions imposed in retaliation for its invasion of Ukraine, Russia’s central bank is reportedly ready to start creating a cross-border settlement system using a central bank digital currency (CBDC).
According to a January 9 report by local media outlet Kommersant, Russia’s central bank will study two potential cross-border settlement models as part of its plans to move forward with the introduction of 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 in order to integrate their CBDC systems.
According to Cointelegraph, 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 model suggests creating a single hub-like platform for Russia to communicate with other nations, sharing common protocols and standards to make it easier for connected nations to send money to one another, Cointelegraph further noted.
The first model, according to Roman Prokhorov, the executive director of the Financial Innovations Association (AFI), was easier to implement but less effective for cross-national interactions.
The Bank of Russia previously stated that it intended to introduce the digital ruble by 2024, with all banks and credit institutions linked to the CBDC platform. Since Russia’s full-scale invasion of Ukraine in late February 2022, which escalated the Russo-Ukrainian war, the country has been subject to increasing financial and trade sanctions, Cointelegraph further stated.
(With insights from Cointelegraph)
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