Russia said on Thursday it plans to have a “digital” rouble capable of making international payments ready by next year and also wants to expand the number of countries that accept its Visa- and Mastercard-style banking cards that are administrated by the central bank.
With Western sanctions cutting off Russia from large parts of the global financial system, Moscow is looking for alternative ways to make key payments both at home and abroad.
The country’s central bank governor, Elvira Nabiullina, said the bank plans for real-world “digital” rouble transactions to be possible next year, and that the digital currency could be used in some international settlements.
“The digital rouble is among the priority projects,” Nabiullina told Russia’s lower House of Parliament. “We have fairly quickly created a prototype … now we are holding tests with banks and next year we will gradually have pilot transactions.”
Russia, like many other countries around the world, has been developing digital money over the last couple of years to modernize its financial system, speed up payments and head off the threat of cryptocurrencies like bitcoin gaining influence.
Some central bank experts have also suggested the new technologies mean countries would be able to deal more directly with each other, making them less dependent on Western-dominated payment channels such as the SWIFT system.
The Bahamas was the first to launch a national digital currency back in 2020, while China is the most advanced among major economies having carried out a mass trial of a digital yuan at the Beijing Winter Olympics this year.
Nabiullina also said Russia aims to extend the number of countries that accept the central bank’s MIR banking cards, an alternative to Visa Inc and MasterCard Inc which have joined other Western firms and suspended operations in Russia.
MIR and China’s UnionPay are among the few options left for Russians to make payments abroad since Russian banks were isolated from the global financial system in response to what Moscow calls its “special military operation” in Ukraine.
Efforts by the West to close possible routes for circumventing sanctions continued on Thursday.
The world’s largest cryptocurrency exchange, Binance, said it was deactivating the accounts of Russian nationals and companies based there that hold the equivalent of more than 10,000 euros ($10,900).
Those affected would still be able to withdraw their money but they will now be banned from making new deposits or trading, a move Binance said was in line with European Union sanctions.
(Reporting by Reuters Writing by Marc Jones Editing by Matthew Lewis)