Sanctioned Russian Bank Tests In-App Operations With Digital Rubles – Finance Bitcoin News

A Russian bank, one of the country’s largest by assets, has completed a successful trial of digital ruble transactions processed through the mobile app. The state-owned Promsvyazbank was one of the institutions placed under Western sanctions earlier this year in connection with Moscow’s actions in Ukraine.

Russian banking experiments with digital ruble transfers via mobile application

Promsvyazbank (PSB) is one of the first Russian lenders to join the experiments with the central bank digital currency (CBDC) issued by the Bank of Russia. According to a report by the business news Plus Journal, the bank recently tested digital ruble transactions through its app for mobile devices.

To carry out the operations, the participants had to complete a registration in the application and set up a digital wallet. Then, using their account, they could exchange regular electronic bank money for digital rubles and transfer digital cash to other customers of the bank as well as those of other banks participating in the pilot project.

All information about the transactions carried out was provided by the digital ruble platform operated by the Central Bank of Russia (CBR), and was immediately reflected on the balances of users’ digital wallets in the smartphone app, the report shows. The platform’s prototype was launched by the monetary authority late last year.

“PSB is one of the first banks that implemented a simple and understandable technology for making transactions with digital rubles in a mobile application and successfully tested it. We see great potential in this instrument, which we expect will become a new settlement standard in the Russian the economy, says Senior Vice President Alexander Chernoshchekin, who heads the bank’s digital business unit.

The top manager added that the successful testing lays the foundation for future operations with the digital ruble and opens up new opportunities for the Russian public and businesses. Reliable and secure transfers in digital currency will be available to the population, while the state will have additional tools to manage budget payments and targeted social payments, he elaborated.

The new settlement technology will help companies solve the problem of automating all payments and internal business processes, Chernoshchekin added. The Bank of Russia is responsible for storage and accounting in the digital ruble ecosystem, and CBR officials claim that all payments are subject to encryption and other measures to prevent fraud.

No less than a dozen credit institutions have decided to join the testing of the digital ruble, once their systems are ready to connect to the CBDC platform, as part of the trials that started in early 2022. This past summer, Russia accelerated the schedule for the project, which aims for a full launch of its digital currency in 2024.

Promsvyazbank is among the top 10 banks in Russia by assets and deposits. Once a private bank owned by Russian oligarchs brothers Dmitry and Alexei Ananyev, it was nationalized by the Russian government in 2018 and has since been recognized as a bank supporting Russia’s defense industry. It has been targeted with sanctions introduced over Russia’s military intervention in Ukraine.

Do you think Russia may introduce the digital ruble earlier than planned? Share your expectations in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.