Bank of Russia Maintains Crypto Ban Stance As It Begins To Test Country’s CBDC

Time Stamp: February 16, 2022 2:22 AM
Source Node: 1610028

The Bank of Russia has started conducting trials for its own CBDC. The announcement coincides with the central bank’s plans to launch the CBDC project’s pilot phase in early 2022.

Despite President Vladimir Putin’s request that his government and central bank work out an uniform regulatory framework for crypto assets rather than a complete prohibition, no agreement has yet been reached.

The Central Bank of Russia has stated that it has completed the first testing of its central bank digital currency (CBDC), also known as the “digital ruble.”

Bank Of Russia Insists On Crypto Ban

The Bank of Russia announced on Tuesday that the testing of its CBDC had begun, with the first digital ruble transfers between people now taking place.

Three of the twelve financial institutions participating in the Bank of Russia’s CBDC pilot program have already deployed the digital ruble on their systems. They even conducted a “full cycle of digital ruble transfers between clients using mobile banking applications,” according to two of them.

In the first phase, users must first open wallets on the CBDC platform using mobile applications, as well as convert their non-cash fiat money into the digital ruble, before transferring tokens to other consumers.

Related Reading | Russia’s Central Bank to Ban on Crypto Mining and Trading 

The second phase will involve putting digital ruble payments for goods and services to the test, as well as smart contract implementations and engagement with the Federal Treasury.

Bank of Russia 

Total market cap of crypto. Source: TradingView

The Bank of Russia intends to facilitate offline CBDC payments in the future, as well as allow non-residents to interact in the digital ruble.

Olga Skorobogatova, the first deputy chairman of Russia’s central bank, commented on the launch, saying:

“The digital ruble platform is a new opportunity for citizens, businesses, and the state. We plan that for citizens transfers in digital rubles will be free and available in any region of the country, and for businesses, this will reduce costs and create opportunities for the development of innovative products and services. The state will also receive a new tool for targeted payments and administration of budget payments.”

The announcement comes amid allegations that the Bank of Russia has publicly opposed the Finance Ministry’s crypto-friendly legislation idea, which was introduced on February 8.

Elvira Nabiullina, the governor of the Bank of Russia, stated in a press conference on Friday that the authority will continue to oppose crypto adoption in Russia by any means necessary, saying:

“We will spare no effort to convince the government and go into more detail about our arguments because we see significant risks. I’m counting on common sense here.”

Russian Ministry To Legalize Bitcoin Mining

While the Russian government continues to develop a legislative framework for digital assets, another suggestion for the crypto mining business has been made by a federal agency.

According to local news source Izvestia, Russia’s Ministry of Economic Development has approved the concept of crypto mining regulation in the country, proposing to allow mining activities in locations with “sustainable surplus in electricity generation.”

The ministry proposed lower costs for setting up mining farms and data centers in selected Russian regions, as well as lower energy rates for such facilities, as part of the plan.

The government also intends to set a power use restriction for each mining, reportedly suggesting higher energy rates in exchange for larger energy spending.

Related Reading | Russian Authorities Consider Proposed Crypto Mining Project Using Associated Petroleum Gas

Featured image from Pixabay, chart from TradingView.com

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