Since being kicked out of the SWIFT payment system by Western countries, Russia has been trying to find another way out. A senior lawmaker recently said that Russia is expected to launch a “digital ruble” early next year, and intends to use “digital rubles” with China to settle mutual settlements. Attempts to undermine US global financial hegemony.
In order to modernize their financial systems, speed up payments and counter threats from cryptocurrencies such as Bitcoin, more and more countries are looking to issue central bank digital currencies (CBDCs), and Russia is no exception.
At present, the Russian central bank has launched a prototype of the “digital ruble” platform and started testing, and at the same time, the Russian parliament is also working on the necessary amendments to prepare for the “digital ruble” on the road.
Olga Skorobogatova, deputy governor of the Russian Central Bank, has said that the economic sanctions imposed by Western countries on Russia are the main reasons for the accelerated development of the “digital ruble” in the country.
Anatoly Aksakov, chairman of the Finance Committee of the lower house of the Russian parliament, said in an interview with the Russian parliament newspaper that Russia is indeed looking for alternative ways to conduct transactions. He says:
The topic of digital financial assets, digital rubles and cryptocurrencies is currently intensifying in society as Western countries are imposing sanctions and creating problems for bank transfers including international settlements
Anatoly Aksakov added that the digitization of money is key so that money flows can bypass systems controlled by “unfriendly countries.” The Russian central bank and government have long debated the issue of cryptocurrency regulation, and he hopes to introduce relevant legislation this year.
China started research and development on the “digital renminbi” as early as 2014, and it is now actively testing. Anatoly Aksakov mentioned that the next step for the “digital ruble” will be the introduction of mutual settlement with China. He said:
If we roll out this feature, other countries will start to actively use it too, which will effectively end US control of the global financial system.
Cooperation with Beijing has become increasingly important to Moscow as Western countries try to isolate Russia, and trade between the two countries is so large and fast that even Russian companies are starting to issue yuan-denominated bonds.
Some central bank experts also said the new technology meant countries would be able to transact with each other more directly, reducing reliance on Western-dominated payment channels such as the SWIFT system.