The Bank of Russia is planning to initiate the development of a cross-border settlement system using a central bank digital currency (CBDC) in response to the sanctions that have resulted from Russia’s invasion of Ukraine.
According to a Kommersant report, the plans for Russia’s digital ruble are targeted for the beginning of 2023, and the central bank is looking into two distinct models for its cross-border system.
The first involves separate countries entering into individual agreements with Russia in order to integrate their CBDC systems, while the second, more advanced option proposes a single platform for Russia to interact with other countries, employing common protocols and standards to enable payment between the connected countries.
Analysts believe that the second option is more beneficial but more complex to execute, and a two-way system could be introduced first with China likely being the initial partner due to its “technological and political readiness.”
Russia’s political situation and the willingness of other countries to collaborate with it present a significant obstacle in the implementation of the digital ruble.