According to Russian media reports, the Russian Central Bank and participating commercial banks want to test various payment methods using the digital ruble. The plan is to experiment with smart contracts and transactions related to real estate and crypto asset purchases.
Bank of Russia to launch smart contracts on digital ruble platform
Russia’s central bank plans to start implementing smart contracts with the digital ruble in April next year, news newspaper Izvestia this week quoted the regulator as saying. Until then, the new incarnation of the national fiat currency will be tested in a variety of scenarios, including automated payments and other transactions between individual users and businesses, such as real estate acquisitions.
The Bank of Russia finalized its prototype platform for a central bank digital currency (CBDC) in December 2021. In January, a dozen Russian banks joined the pilot project. In the first phase, participants are issuing digital rubles, setting up wallets for banks and citizens, and transferring money between them. Smart contracts will be demonstrated in the second phase of the pilot.
Promsvyazbank (PSB) explained that smart contracts facilitate the execution of contractual terms without requiring a third party to act as a guarantor. The money is kept in a smart contract wallet on the digital ruble platform and sent to the seller’s wallet as soon as the title is transferred. Rosbank added that the technology could be used for targeted financing of property purchases by lenders.
Vneshtorgbank (VTB) elaborated for this article that digital ruble smart contracts will allow large corporations to conduct complex transactions. The bank is also participating in the pilot, telling Izvestia that it plans to start testing the use of the digital ruble to purchase digital financial assets (DFA) in September.
DFA is the legal term currently used to describe cryptocurrencies and tokens in Russia. A new bill “On Digital Currencies” that aims to expand the regulatory framework for crypto assets will be reviewed by Russian lawmakers this fall. The digital ruble project could also be boosted by financial and technological restrictions Russia has imposed on Russia due to the war in Ukraine, experts in Moscow said.
Do you expect Russia to accelerate the progress of the digital ruble currency project? Let us know in the comments section below.
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