The Central Bank of Russia (CBR) has outlined two potential models for developing a central bank digital currency (CBDC) for international payments. According to a presentation seen by business newspaper Kommersant, the central bank will explore bilateral interconnection with other national CBDCs or a shared platform supporting multiple CBDCs, starting in the first quarter of 2023.

In 2021, the Bank for International Settlements (BIS) published a report on the potential of using CBDCs for cross-border payments, or multiple CBDCs (M-CBDCs), outlining three models. The models that the CBR plans to use represent two of them. There are already several cross-border CBDC trials, with the most advanced being MBridge involving the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand and the United Arab Emirates.

The head of the Russian Financial Innovation Association told Kommersant that China is probably the first partner in the initiative, due to its technological and political readiness.

Alexei Voylukov, vice president of the Russian Banks Association, said a digital ruble is unlikely to improve Russia’s cross-border payment problems in the immediate future because pilots can only occur with friendly countries that are technically ready. In other words, the challenge facing Russia relates to sanctions and hostile countries. Jurisdictions like China don’t impose penalties, so payments aren’t as big of a challenge there. Therefore, one digital ruble will not make much of a difference.

The fact that the central bank issued a report is not surprising, since the Russian prime minister set a deadline of the end of December to clarify the use of digital currency for cross-border payments. Meanwhile, in November, the CBR launched a broader consultation on digital assets and tokenization, excluding cryptocurrencies.