In spite of continuous sanctions imposed in retribution for its invasion of Ukraine, Russia’s central bank is reportedly planning to establish a cross-border settlement system using a central bank digital currency (CBDC).
According to local media outlet Kommersant, the central bank will investigate two potential cross-border settlement solutions as it moves forward with the introduction of the digital ruble in Q1 2023.
The first option proposed is for nations to enter into independent bilateral agreements for the integration of digital currency systems. Under this scenario, each country’s platforms would ensure that formats are converted and transferred between countries in compliance with established rules and regulations.
The second option suggests creating a single platform for integration between Russia and other nations, establishing similar standards and protocols to make it easier for connected countries to send money to one another.
Roman Prokhorov, head of the board of the Financial Innovations Association (AFI), stated:
“Obviously, the implementation of cross-border settlements using the CBCC will depend not so much on the readiness of the Russian side, here our jurisdiction to promote the CBCC project is confidently in second place after the PRC, but on the readiness of our partners.”
Alexey Voylukov, vice president of the Association of Banks of Russia, claims the introduction of a digital ruble won’t alter or improve the political situation for Russia, and trials for the CBDC platform can only be conducted with nations that are friendly toward the Russian government and have the necessary technological infrastructure.
It is worth noting that the Bank of Russia rejected cryptocurrency settlement payments toward the end of last year and issued a statement indicating that the government no longer supports the notion that was put forth in February regarding new regulations to include cryptocurrencies in the country’s currency.
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