- Russia is going ahead with plans to pilot a digital version of the ruble.
- The central bank is trying to boost the currency after an 18% slide against the dollar this year.
- Many countries, including China, India, and Japan, are working on digital currency pilot projects.
Russia’s plans to introduce a digital ruble are gaining momentum as it turns to increasingly unorthodox strategies to revitalize its struggling economy.
Legislation for a digital currency was approved by upper house of parliament on Wednesday and a pilot scheme could start as early as August, Bloomberg reported.
Having been shut off from the global financial system since the invasion of Ukraine in February 2022, Russia’s economy has suffered. The ruble is one of the worst-performing currencies this year, having last month fallen to a 15-month low against the dollar after the failed Wagner Group uprising.
Russian exports have also been stifled due to western economic sanctions imposed after the invasion. Russia’s current account surplus fell by 93% in the three months to June 30 compared with the same period last year, Insider previously reported.
Now, the central bank is looking at digital currencies to revive the ruble and ease cross-border payments.
Nikolay Zhuravlev, deputy chairman of the Russia’s senate, the Federation Council, said this month the digital ruble could improve its international trade outlook.
“In the current environment, it is important to have independent payment instruments and financial information channels that can be used in our trade with foreign partners,” he said.
A rising number of central banks are exploring the idea of a digital currency. Eleven countries have launched one and nine G20 nations have pilot schemes, according to the Atlantic Council.
China’s digital yuan pilot is leading the way after making its debut in 2020. It’s being tested in more than 200 scenarios such as public transit, stimulus payments and e-commerce, per the Atlantic Council.