Russian digital ruble
Politics,  Regulation,  Technology

Digital ruble coming as soon as 2021

The head of Russia’s central bank said a pilot program could come next year, and promised confidentiality but not anonymity

A Central Bank of Russia-issued digital currency could come as early as next year, but it will not have the same privacy as cash.

Speaking after a meeting of the bank’s board, CBR head Elvira Nabiullina said that a digital ruble pilot program could be in place before the end of 2021, according to news outlet Tass. 

While nothing has been decided, the possibility of launching a digital ruble “is quite real,” she said. 

It will not replace the physical ruble, she added.

The digital ruble project “fits very organically into what is called the development of the digital economy as a whole,” Nabiullina said. “A digital transformation is taking place. Of course, there must be a transformation of the settlement system.”

Part of that transformation will be privacy-based. While saying that a digital ruble will have very strong confidentiality, transactions will be more transparent than with physical cash, she warned.

“There will be no anonymity in the sense that there is in cash,” she said. “But it is assumed that confidentiality will be strengthened.”

The CBR is proceeding with the assumption that “the digital ruble should be provided with maximum confidence and maximum confidentiality is the main task in the introduction of the digital ruble.”

Privacy has been a concern with other central bank digital currencies, most notably China’s, which is thought to be on the verge of launching a CBDC .

The head of the People’s Bank of China’s digital currency research institute came up with the wonderfully Orwellian phrase “controllable anonymity” in regard to a digital yuan renminbi.

“We know the demand from the general public is to keep anonymity by using paper money and coins,” Mu Changchun,  said at a conference in Singapore, Reuters reported on November 12. “[W]e will give those people who demand it anonymity in their transactions.”

He then added:“But at the same time we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF [counter terrorist financing], and also tax issues, online gambling, and any electronic criminal activities. That is a balance we have to keep, and that is our goal.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.