The Bank of Russia is actively working on the Digital ruble platform. In its ‘Digital Ruble’ Consultation paper published in October 2020, the central bank outlined the main principles and features of the issuance of a CBDC and presented the range and key stages of the project.
In April 2021, the Digital Ruble concept was released. The outlined plan detailed the CBDC model, associated issuance methods, and outlined the key phases of the project. The chosen model designates the Bank of Russia as the exclusive issuer of the CBDC. Functioning as a liability of the central bank, the CBDC can be exchanged for physical or digital money at a one-to-one ratio. The involvement of commercial banks will entail establishing digital ruble wallets for their clients on a specialized Digital Ruble platform. Although these wallets won’t be recorded in the banks’ official records, the security of funds is assured by the Bank of Russia. Notably, these digital ruble wallets will not accrue interest, thus primarily serving transactional purposes rather than as a store of value. Additionally, CBDC issuance will not introduce new money into the system; instead, it will lead to shifts in the composition of broad money, partially substituting both physical cash and deposits.
In December 2021, the prototype for the Digital Ruble platform was developed, with twelve banks (JSC ALFA-BANK, JSC Bank DOM.RF, JSC Ingosstrakh Bank, VTB Bank (PJSC), Bank GPB (JSC), QIWI Bank (JSC), PJSC AK BARS BANK, PJSC MTS-Bank, PJSC Promsvyazbank, PJSC Sovcombank, PJSC Bank Sinara, PJSC ROSBANK, and TKB BANK PJSC) participating.
By Q1 2022, the Bank of Russia introduced the pilot phase of the Digital Ruble platform within a controlled environment. The initial digital ruble transfers between individuals were successfully conducted.
The collaborative interaction between the Bank of Russia and market participants regarding digital ruble operations is based on a two-tier retail model. The Bank of Russia functions as the CBDC issuer and platform operator, while clients access their digital wallets via mobile applications provided by their respective banks. The Digital Ruble platform opens new avenues for citizens, businesses, and the government, encompassing payments for goods and services, public services, smart contract transactions, and interactions with the Federal Treasury. Future plans include offline mode payments, integration with financial intermediaries and digital platforms, and enabling non-resident clients to transact with digital rubles.
The practical testing of digital ruble transactions in real-world scenarios is set to commence in August 2023. Thirteen banks and a limited number of clients will participate in this pilot testing phase. Upon successful completion of staged testing and scenarios, the digital ruble will be introduced for widespread use. This phased introduction will take place in 2023 and 2024, with full active utilization expected for both individuals and businesses by 2025.
To promote accessibility, the Bank of Russia’s Board of Directors has established transaction fees for digital ruble transactions. Individuals will not incur fees for digital ruble payments and transfers. Businesses accepting digital ruble payments for goods and services will be subject to a fee of 0.3% of the payment value (up to ₽1,500). Housing and utility companies will be charged 0.2%, not exceeding ₽10. A ₽15 fee per transaction will apply to business-to-business transfers. These fees will be effective starting January 1, 2025, while a fee-free period will precede this on the regulator’s platform.
The Bank of Russia’s platform allows any individual or company to establish a digital ruble account (digital wallet) without any associated fee. Furthermore, transfers from bank accounts to digital wallets and vice versa will also remain fee-free until the specified date.
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