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Russia’s apex bank, the central bank of Russia is currently undergoing a test for its proposed digital Ruble with 12 different commercial banks. There are suggestions that Russia could be fast-tracking the development of a virtual currency to evade sanctions.
The latest move signals the intention of the major bank to start the pilot phase in 2023, rather than the 2024 initial date.
Evading SWIFT Sanctions
The state-controlled news agency CBR reports that the central bank’s digital currency (CBDC) may become fully operational in 2023. While Russia had planned the e-Ruble’s pilot phase for 2024, officials think 2023 is even just as possible.
According to reports, the launch of the CBDC may help the country to evade the financial implications of the world leaders cutting off Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Olga Nikolaevna, the central bank’s Deputy Governor, according to a report by news outlet TASS, was optimistic about the proposal. She stated that the digital currency will help the Balkan country evade the consequences of the disconnection from SWIFT.
The initial digital currency program was conceived in 2021 with the sole aim of addressing the concentration of bank holdings. However, the sanctions by world leaders, especially the new SWIFT restrictions have forced the country to ramp up its efforts.
Nikolaevna stressed that the banks testing the digital currency were developing at varying rates, with most making very quick advancements. This development has helped to clarify the question of the possibilities for banks to make faster advancements.
Furthermore, the bank maintained that most of the ‘’self-respecting states’’ will key into the digital currency industry in three years.
Turning to Crypto
This is not the first time Russia would be turning to alternative means to circumvent sanctions. For example, in April, during the wake of its attack on Ukraine, many crypto companies were forced to comply with sanctions imposed by world leaders.
In a report by Cryptoadventure in April, Binance released an update on its treatment of Russia-based accounts. The exchange stated that it would place holding crypto worth over 10,000 Euros into only ‘’withdrawal mode.” This situation will make it impossible for them to make more trades with their existing accounts.
Binance alongside Coinbase and Kraken were some of the exchanges that refused to unilaterally leave Russia despite pressures.