Russia’s push for the Digital Ruble is gaining momentum. Of course, this has a meaning for Bitcoin. Despite increasing CBDC sentiment, experts think Bitcoin could be better for cross-border transactions.
Statement from the Central Bank of Russia
Olga Skorobogatova, First Vice-President of the Central Bank of Russia, believes that the integration of Central Bank Digital Currencies (CBDCs) has the potential to replace SWIFT, a popular financial network messaging system. This will mean that payments and other information related to these CBDCs will be handled on a completely different settlement infrastructure than the one currently used.
According to Skorobogatova, the countries involved will only have to make an agreement based on their operational modalities. Since its invasion of Ukraine, Russia has been seeking alternative payment options to avoid Western sanctions. At one point, the country was considering the option of accepting payments in Bitcoin (BTC) for the sale of oil and gas from “friendly” countries such as China and Turkey. Since then, Skorobogatova has demonstrated a high level of confidence in Russia’s capacity to circumvent the current payments embargo.
Developing the Digital Ruble
After a comprehensive search for an alternative, Russia is taking an important step. It is now in the effort to develop and make available the digital Ruble, the national digital currency. The designed CBDC will have cross-border capabilities to facilitate international trade. Speaking of specs, CBDC will adopt a hybrid formula integrating centralized and blockchain solutions. While there is an urgent need for this payment option, Skorobogatova confirmed that the project will be implemented in stages.
Russia plans to design the digital ruble like China’s digital Yuan. Therefore, the pilot phases will be similar. Unlike some other countries that encourage their use by using their CBDCs for payment in government institutions, Skorobogatova claimed that Russia would not resort to such a strategy when comparing it to the Russian card payment system known as Mir. In particular, she confirmed that the government will not pay employees’ salaries in digital rubles to encourage its use.
Bitcoin preference
Instead, the Bank of Russia will be the primary tester of the digital ruble. Accordingly, a separate unit will be allocated to resolve any disputes that may arise. In particular, there will be no loans and no interest rates in CBDC as the national digital currency is designed for payments and transfers only. The manager notes that the focus of Russia, meanwhile, is to promote a retail CBDC. However, he added that offline capabilities may be added in the near future.
cryptocoin.com When we look at it as a whole, Skorobogatova says, “You need to develop your own solutions for offline payments. This is within our plans. But not at the initial stage.” she says. Amid the CBDC issue between countries, some organizations are still worried about the drawbacks of implementing a national digital currency. US Presidential candidate Robert F. Kennedy Jr. He thinks that CBDCs are tools of control and pressure that are very likely to be abused. He acknowledges that it does not offer financial freedom and pales in comparison to the decentralization BTC provides. With such an argument, many experts and crypto advocates are of the opinion that Bitcoin could be a preferred cross-border payment option for many.
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