INSUBCONTINENT EXCLUSIVE:
paving the way for the roll-out of the Digital Ruble comes into force on Tuesday, establishing the blockchain-based currency as a new form
of legal tender inside Russia.Although designed as a new domestic payments system, since Russia invaded Ukraine in February 2022, Russian
lawmakers, analysts, think tanks and state media outlets have touted the Digital Ruble as a game-changer in helping Russia skirt Western
to carry out settlements with foreign countries and foreign companies
Thus, it will be very difficult for our enemies, including the United States, to influence our financial activities
It will sit alongside cash and existing forms of electronic money as a means of payment
The Central Bank says the Digital Ruble will reduce transaction costs for businesses, add an extra layer of security for consumers and help
It is currently being tested by the regulator and commercial banks.Once launched, businesses will be able to accept payments in Digital
Rubles in shops, potentially including through offline methods like NFC payments
Digital Rubles will be stored directly in accounts with the Central Bank, but accessible through wallets with commercial banks
Digital Rubles will be fully convertible into both cash and other electronic payment forms
The Central Bank will not pay interest on holdings of Digital Rubles and will not allow borrowing in Digital Rubles.Russia claims that the
Digital Ruble, if used for international transactions, will enable payments without the involvement of foreign commercial banks or Western
financial infrastructure, like the SWIFT financial messaging system.Commercial banks are on the frontline of enforcing Western sanctions,
with the power and responsibility to block transactions involving sanctioned entities
Given the high importance of carrying out transactions in U.S
been cautious in their transactions with Russia, wary of being hit with secondary sanctions.But because CBDCs, in theory, do not need the
involvement of a commercial bank, Russian analysts say the Digital Ruble will let foreign companies trade directly with their Russian
is that such payments will be made without using the banking system of other countries, only through the Digital Ruble platform, operated by
Thanks to the Digital Ruble, banks are removed from the equation, and all companies ready to trade with Russia will be able to do it
Digital Ruble will be a purely domestic payments system
The Central Bank has mentioned the possibility of using it for cross-border payments sometime in the future, but has not given any
agreements and technology sharing with other central banks, or some kind of unified clearing system for CBDCs
technical compatibility with other CBDCs
partners, it could be potentially used to circumvent the U.S
nexus and hence sanctions
sanctions, they can already do that with rubles
and exports payments into Chinese yuan.Shagina says this switch to non-Western currencies, and the use of non-Western traditional payments
out secondary sanctions against the central banks of Russia-friendly countries that carry out settlements with Russia in Digital Rubles
research center, wrote in a recent report.For its part, the Central Bank has been cautious in pushing the Digital Ruble as a
sanctions-avoidance tool, focusing mainly on its domestic functions
