Russia’s much-hyped digital ruble is hitting the brakes again. The Bank of Russia just announced that their central bank digital currency, CBDC won’t be rolling out as planned on July 1. Instead, it’ll arrive a bit later, shared Elvira Nabiullina, the bank’s governor.
Moscow, we have a problem
She dropped this little bombshell during the annual meeting of the Association of Russian Banks, and while she tried to keep things upbeat, let’s just say the delay isn’t exactly a shocker.
Banks involved in the pilot project are raising their hands like students in a tough math class, asking for more time to prep for the big debut.
They’re concerned about the upgrades they’ll need to handle this new digital currency.
Fair enough, as no one wants to launch something half-baked. So, the central bank is taking a step back to iron out the details and figure out an economic model that works for everyone.
Vires is numeris
This pilot project kicked off in 2023 with 15 banks and a small group of users, 1,700 individuals and 30 companies.
It was supposed to go live by mid-2024, but here we are with yet another delay. Oh, and implementing this thing?
It’s going to cost each bank between 200 million and 300 million rubles, or around $2.3–$3.4 million. Smaller banks will get subsidies from the central bank, but still, yikes, lot of money.
While some see potential in the digital ruble’s programmability, think smart contracts for mortgages or government spending limits, critics aren’t sold.
Financial consultant Olga Goncharova called programmable money a threat to financial stability and said it doesn’t do anything traditional tools can’t handle.
And let’s be real, most people aren’t exactly clamoring for CBDCs anyway.
Geopolitic chess
Then there’s the geopolitical angle. Some say CBDCs could help Russia sidestep sanctions by bypassing SWIFT and promoting de-dollarization in trade with BRICS nations, and honestly, there are chances. But here’s the catch, as no one seems eager to play ball just yet.
Nabiullina confirmed plans for a national QR code system tied to Russia’s Mir payment network.
It sounds promising on paper, but like everything else in this story, we’ll believe it when we see it.
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