Russia starts trial with digital central bank currency and digital ID

Starting in April, the Central Bank of Russia will begin a pilot project with a digital ruble. The project will be launched for direct transactions between individuals and for retail merchants. In addition to the digital ruble pilot, Moscow will also begin rolling out a digital identification card.
 

Digital Central Bank Currency Pilot

According to the Russian news agency TASS, the Deputy Governor of the Central Bank, Olga Skorobogatova, said the pilot will involve real transactions between real customers—but for a limited number of transactions and only for a limited number of customers from thirteen banks that have already confirmed their technical readiness.
"We plan to launch the digital ruble project in a pilot phase starting from April 1, with operations—transfers between individuals and payments in trade and service companies," Skorobogatova said.
 

Central Bank Digital Currencies (CBDCs): A Crisis Recovery Tool for Governments

The general public will not participate in the initial phase of the pilot, as it will start with selected customers. Once the digital ruble has been tested in practice, the bank will decide how to expand the project.
 
In 2020, the Central Bank of Russia already proposed the idea of a central bank digital currency (CBDC). At that time, the bank published a consultation document outlining potential designs for the digital ruble. The idea behind the project is to make the Russian economy less dependent on the US dollar and to mitigate the impact of Western sanctions.
 
The expectation was that the CBDC pilot would begin in 2021, but it raised some concerns in the Russian banking community that rolling out infrastructure for the digital ruble would be challenging for lenders and would make the banking system more centralized and less diverse. The Central Bank of Russia later promised to adjust the concept so that it would not harm the traditional system.
 

Digital Identification Pilot

Alongside the pilot of a digital central bank currency, Moscow will also start rolling out a digital ID. "The Russian Ministry of Digital Development, together with the Federal Security Service (FSB), will submit a draft resolution by May 1 that will allow the use of a digital identity document on smartphones instead of a passport in some everyday situations," said Russian President Vladimir Putin, according to news agency Interfax.
 
The Minister of Digital Development, Maksut Shadayev, said there will only be a few situations where a digital personal ID can be legally used instead of a passport. "We are not abolishing the passport," he reassured.
 
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