There are ongoing sanctions against Russia as a result of its invasion of the Ukraine; however, reports indicate that Russia’s central bank is about to start building a cross-border settlement system that would use a central bank digital currency (CBDC).

According to a report published on January 9 by a local news outlet called Kommersant, plans to move forward with Russia’s digital ruble are expected to arrive in the first quarter of 2023. Russia’s central bank will study two potential cross-border settlement models. . before going ahead with the plans.

In the initial version of the plan that has been suggested, different nations would integrate their CBDC systems by entering into separate bilateral agreements with Russia.

The second, more sophisticated approach suggests establishing a single, hub-like platform where Russia and other nations can interact with each other, sharing common protocols and standards to make it easier for linked countries to pay each other.

The other possibility was more developed and he reflected on the possibility of implementing an initial two-way system, with China as the most likely partner due to the advanced political and technical preparation of the country.

According to reports in September, Russia’s plans to use its digital currency for deals with China are expected to take place sometime in 2023.

Still, there are many who are of the opinion that Russia’s CBDC game will not be hampered by technological limitations, but rather political limitations.

Alexey Voylukov, Vice President of the Russian Banking Association, stated that the introduction of a digital ruble will not change or improve Russia’s global political situation, and that tests for the CBDC platform can only be conducted with friendly countries. with the Russian government and are technologically prepared. He also stated that the tests for the CBDC platform can only be done with countries friendly to the Russian government.

However, the Bank of Russia had said that it intended to launch its digital currency by 2024, with all banks and credit institutions linked to the network maintained by the CBDC.

Since Russia launched a full-scale invasion of Ukraine in late February 2022, marking an escalation in the Russia-Ukraine conflict, Russia has been subject to an increasing number of economic and trade sanctions.

Since then, he has experimented and pondered methods to circumvent sanctions, such as the country’s central bank pondering the possibility of using cryptocurrencies in the country only for the purpose of supporting international trade.

In September, the Bank of Russia and the Ministry of Finance reached a consensus on a law that would allow Russian citizens to make payments across international borders using cryptocurrencies.