Elvira Nabiullina, Governor of the Bank of Russia, talked about the future of cash in the context of the digital ruble pilot currently being executed in the country. Nabiullina explained that physical money was not disappearing and that the future implementation of the digital ruble was directed to offer payment options to users.
Bank of Russia Governor Elvira Nabiullina: ‘People Should Be Able to Choose How to Make Payments’
Elvira Nabiullina, Governor of the Bank of Russia, explained that the institution had no intention of eliminating cash in the context of the tests being conducted with the digital ruble, Russia’s central bank digital currency (CBDC). In a press conference on September 15 after a meeting with the bank’s board of directors, Nabiullina explained that the institution was focused on giving Russians more choices when paying.
According to Russian state-owned news outlet TASS, Nabiullina stated:
Our fundamental position is that people should be able to choose how to make payments. We are presenting choices.
Cash will continue to be one of these tools for making payments, she explained, reiterating it was not going away anytime soon, as there is still a sizable demand for it. On this subject, she detailed:
We are still developing cash, and we are even creating a new series of banknotes with a fresh design.
Digital Ruble as a Payment Tool
The Bank of Russia clarified that the digital ruble is not being proposed as a substitute for bank accounts or deposits. To avoid users considering a direct competitor to those, the bank has established limits for the amount of digital rubles that users might store in these accounts. Furthermore, the funds stored in digital ruble accounts will not collect any interest.
The bank expects the digital ruble to be leveraged for making local and cross-border settlements. In September, Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, estimated that the digital ruble would be used to make cross-border payments by 2025.
The Russian CBDC will implement a QR-based payment system for making local payments. Offline payments will also be available, with users transferring part of their funds to a separate wallet. This use case is projected to be tested in the second stage of the digital ruble pilot, estimated to happen in 2024.
Nabiullina had stated previously that she expects the mainstream adoption of the digital ruble to happen in 2025.
What do you think about cash and its relationship with the digital ruble in Russia? Tell us in the comments section below.