The Russian Central Bank released a CBDC report: It may pilot the digital ruble to track the use of government funds

The Central Bank of Russia today published a report on the possible launch of the digital ruble. According to the report, the bank is accepting feedback on the idea until December 31. Then, the data will be evaluated and the digital ruble may be piloted among a limited user group. Only then will the bank decide whether to officially launch the project.

The report proposes a central bank digital currency (CBDC) that would complement other forms of money, namely cash and bank accounts. It has not yet been determined whether it would use a distributed ledger, a centralized system, or a hybrid system.

The report highlights the value of smart contracts pioneered on the Ethereum blockchain.

This is not the first time the Russian central bank has explored CBDC.

Last summer, Bank of Russia Governor Elvira Nabiullina said the bank would not issue its own digital currency anytime soon but was studying the issue.

The report specifically mentioned that unlike cryptocurrencies and stablecoins, the digital ruble will be guaranteed by the government and the Central Bank of Russia.

The Bank of Russia believes that the existing digital payment infrastructure used by payment terminals and ATMs can also be used as a payment rail for the digital ruble.

The digital ruble will stimulate innovation and competition in the financial sector, the report said, as it will make it faster and easier to transfer funds from one financial broker to another.

It could also help ensure that funds allocated to government-funded projects are not diverted through corruption, with the digital ruble being accurately labeled based on how it is spent.

The report pays particular attention to privacy issues. It says that while it would not be possible to use the digital ruble anonymously, unlike paper money or decentralized cryptocurrencies, “data on transactions with the digital ruble would contain more limited information than in existing payment systems.”

Banks will have access to information about who was involved in a transaction, but not the purpose of the transaction, the report said.

The regulator envisions that the launch of the digital ruble could lead to a period of instability for banks if people start withdrawing funds from their accounts to buy digital rubles.

In this case, the Russian Central Bank will help banks maintain their balance through additional loans. The amount of digital rubles that can be withdrawn at one time will also be limited, similar to the cap on cash withdrawals.

Image source: pixabay

byAmy Liu

This article is from Bitpush.News. Please indicate the source when reprinting.