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The Bank of Russia is considering 2025 as the year when the digital ruble, the nation’s central bank digital currency (CBDC), could achieve widespread acceptance. This initiative reflects the central bank’s strategic plan to enhance the payment ecosystem within the country.
Olga Skorobogatova, the first deputy governor of the Bank of Russia, highlighted that the digital ruble is regarded as an additional payment alternative alongside current methods such as the Faster Payments System, Mir payment cards, QR code/NFC payments, biometric payments, and cash.
Russia’s Ruble Will Coexist With Physical Cash
The rollout of Russia’s digital ruble prompts inquiries regarding the possibility of citizens receiving state payments solely through the central bank digital currency (CBDC). This would resemble the Mir payment system, which was established in 2014 as a state-managed card payment solution to address concerns regarding potential US and European sanctions.
The Bank of Russia has indicated that the digital ruble will exist alongside physical cash and is not designed to replace it. However, China, regarded as a close ally of Russia, has already begun disbursing payments to civil servants in Changshu using the digital yuan to encourage the adoption of the state-controlled currency.
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The Bank of Russia intends to forge agreements with China, India, and the UAE to link their payment systems, allowing Russians to utilize the digital ruble for international transactions. The introduction of the digital ruble is not expected to significantly change or enhance Russia’s geopolitical standing. Furthermore, Russian officials have acknowledged that CBDC trials can only be conducted with technologically advanced and friendly nations.
Ruble Doesn’t Use Biometric Data
The Russian Central Bank previously clarified that the digital ruble is not connected to the state’s initiatives to gather biometric data. The bank commenced CBDC trials in 11 cities across Russia about a month ago.
In contrast, Russian legislators enacted a law last year allowing banks and state agencies to collect biometric data from their clients, including facial scans and fingerprints. This initiative resulted in the creation of the Unified Biometric System (UBS), designed to function as a national digital remote identification platform utilized by the Kremlin and financial institutions.
Unfortunately, these two distinct projects have become conflated in the perception of some observers, leading to a rise in scams related to the digital ruble and biometrics. Reports have indicated that fraudsters have reached out to individuals in various regions, urging them to provide biometric data to convert their cash ruble savings into CBDC tokens.
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