Digital Ruble: A Game-Changer for Russia’s Financial and Economic Resilience?

The digital ruble project, also known as the Central Bank Digital Currency (CBDC) project, was initiated by Russia on 15 August. Russia’s central bank is leading the project and aims to launch the digital ruble by 2024 to make it available to Russian citizens by 2025. The initial phase of the pilot program involves testing the currency with 13 banks, 30 retail locations, and actual consumers.

The hope is that blockchain technology will help Russia limit the impact of international sanctions and tighten control over its economy. Just like cryptocurrencies, blockchain allows direct transactions and storage through electronic wallets. The main difference is that the Russian central bank issues the CDBC, and the security services tightly monitor the wallets. The move is seen as a way for the Kremlin to better control its citizens.

The digital ruble may significantly impact Russia’s economy and the global financial system. The digital currency could work as a shield to help Russia evade international sanctions and continue making domestic and international transactions despite being largely banned from the international banking system. Whether the country is able to use the digital ruble for international payments depends on the willingness of other countries to accept it without first converting it into dollars.