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Russia to initiate digital cross-border payments in 2025

Thursday 13 June 2024 10:53 CET | News

Russia plans to initiate its first cross-border payments using the digital ruble in the second half of 2025.

 

These transactions might involve China or Belarus, according to state representatives. They noted that significant global progress in using national digital currencies is limited. Therefore, many countries are not yet ready to implement digital currencies in international settlements. 

However, he expects this to become common practice within five years. They mentioned that China has advanced with its digital yuan, making it a potential partner for digital currency settlements with Russia. Belarus is also considered a possible partner due to its friendly relations with Russia.

 

China is engaged in multiple central bank digital currency (CBDC) projects, including the digital yuan and mBridge, a cross-border CBDC initiative. Discussions are also ongoing about a BRICS Bridge project, involving both China and Russia. Before Russia can begin cross-border tests, it needs to establish the digital ruble domestically.

Up to date

The first phase of digital ruble pilots began in August 2023, with VTB as the first Russian bank to conduct transactions. Currently, 30 companies in 11 cities accept the digital ruble through VTB. For instance, Lukoil gas stations accept the CBDC for purchases, users can pay for phone or internet services at Rostelecom, and it is usable on the Moscow Metro.

Recently, the central bank signed a cooperation agreement with the Mayor of Moscow to expand the CBDC's use in metro travel, parking, and other transport services. The city also plans to implement smart contracts for automating the insurance of its urban transport fleet.

In addition to ecommerce and online transactions, users can transfer funds between their bank accounts and digital ruble wallets at 14,000 VTB ATMs. VTB also conducted a cross-border transaction with Belarus last year in a test environment.

Launching step by step

VTB is among 13 banks participating in the first phase of trials. The second phase will include Russia’s largest bank, Sber, the largest digital bank, Tinkoff, and 15 other banks. This phase will involve more participants and retail outlets, introduce dynamic QR codes, and facilitate transfers between companies and other legal entities.

According to Vadim Kulik, Deputy President and Chairman of the Board of VTB, expanding the participant base, especially through legal entities, will provide additional opportunities for using the digital ruble and further develop the project.

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Keywords: cross-border payments, digital payments, settlement, CBDC
Categories: DeFi & Crypto & Web3
Companies:
Countries: Russian Federation
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DeFi & Crypto & Web3