Digital Ruble Announced by the Bank of Russia
The Bank of Russia is considering issuing a digital currency through their own central bank in the form of a digital ruble. Bank of Russia’s move will serve as part of an objection aimed toward developing their national payment system. The launch of the new digital currency will help in creating business and household opportunities to meet the needs of an increasingly competitive digital world.
As an additional form of Russian national currency, digital rubles will be digitally issued through the Bank of Russia. The best characteristic of a digital ruble, is that it combines to pros of cash and non-cash rubles. Much like the individual numbers found on banknotes, units of the digital ruble will possess unique identifiers. It will enable holders to utilize digital ruble offline, in the same way cash is used – without internet access. Additionally, digital currency allows individuals to make online payments in the same way cashless payment methods offer.
Business, individuals, the government, and financial market participants alike, will be given access to the digital ruble. Three functions of a digital ruble include: use as a form of payment, a measurement of value, and a store of value. Each form of Russian ruble is created equal, regardless of whether they’re cash or non-cash. One non-cash ruble is equal to a cash ruble, and one ruble is equal to a digital ruble.
Organizing Digital Ruble Operations
Because digital ruble transactions happen offline and online, users will enjoy transactions regardless of whether they utilize payment or mobile apps, or electronic wallets. As far as offline transactions are concerned, it will be possible to reserve various amounts of digital currency in an electronic wallet when a network connection is unavailable. This is similar to an individual utilizing cash on hand whenever they visit merchants who don’t accept bank cards. Basically, wherever a connection is present the transactions will take place, much like the method surrounding cashless payments.
Are Digital Rubles Replacing Cash?
Regardless of the introduction to digital currency, the Bank of Russia will support all available forms of the ruble in an equal manner. While a digital ruble is not considered a cash replacement or non-cash ruble, it is considered to be an add-on to more convenient fiat forms of money.
When are Digital Rubles Expected to Release?
A decision has not yet been made by the Bank of Russia, as to the date of the digital ruble release. The potential ways of implementation were outlined in a consultation paper, known as “A Digital Ruble”. The introduction of a digital ruble is expected to be a major influence on society, and especially the economy. For this reason, the Bank of Russia believes it is crucial to discuss key aspects, in addition to benefits, potential risks, timeframes and milestones, as far as public implementation of a digital ruble.