The Bank of Russia is Russia’s central bank and has announced that they will be testing cryptocurrencies to make international payments with selected companies.
According to the bank, the pilot will include a few Russian companies. It will focus on using cryptocurrency as a way to make cross-border payment. This program will assess the feasibility and possible risks of using cryptocurrency for international payments. It will also identify any regulatory or legal issues.
The Bank of Russia clarified that the pilot program was not intended to encourage wider adoption of cryptocurrencies by either the bank nor the Russian government. It is meant to be a way to examine the potential uses and risks of cryptocurrencies in controlled environments.
As central banks around the globe increasingly consider the use of digital assets and cryptocurrencies as a way to make payments and conduct financial transactions, this announcement is timely. The European Central Bank and the Bank of England have expressed an interest in exploring the possibility of using central bank digital currency (CBDCs) to make payments. Several countries, including China and India, have launched pilot programs or are developing their own CBDCs.
It is still unclear how successful the Bank of Russia pilot program will prove to be or whether it will encourage wider adoption of cryptocurrency for international payments. The fact that the central banking is open to considering the use of cryptocurrency is a positive sign. It could lead to greater adoption in the future.