Digital Ruble Deployed for Moscow Metro Contract Amidst National Rollout Preparations

Digital Ruble Marks Milestone in Moscow Metro Project

The Russian Federation's central bank digital currency (CBDC), the digital ruble, has been successfully employed in a government contract pertaining to construction work on the Moscow Metro. This event represents a notable advancement in the digital ruble's pilot program, which commenced with real transactions in August 2023. The transaction was overseen by VTB Bank, with Mosinzhproekt, the Moscow government's engineering arm, making payments to several unnamed building contractors.

Enhancing Transparency in Government Contracts

The application of the digital ruble in this public sector contract aligns with the stated objectives of Russian officials to leverage the CBDC's smart contract functionalities. These features are intended to enhance transparency and combat fraud and corruption within government contracts and welfare payments. Maria Bagreeva, Moscow's Deputy Mayor, affirmed that the integration of the digital ruble into the financial activities of Moscow city bodies is set to continue, with an anticipated increase in payment volumes.

The Moscow Metro has served as an informal testing ground for the digital ruble since 2023, including pilot operations allowing users to top up Troika cards, the city's reusable contactless smart cards. Maxim Liksutov, Moscow's Deputy Mayor for Transport and Industry, previously noted joint tests with the Central Bank and VTB involving the Troika card.

Digital Ruble's Evolution and Objectives

The Bank of Russia initiated the digital ruble project in April 2021, positioning it as the third form of national currency alongside existing cash and non-cash rubles. The pilot testing phase, involving real transactions, began in August 2023 with the participation of 13 banks, approximately 600 individuals, and 30 trade and service companies across 11 Russian cities. The digital ruble aims to:

• Streamline cross-border payments
• Reduce reliance on international payment systems like SWIFT
• Enhance financial sovereignty

The pilot program has seen significant expansion, with the Central Bank planning to extend participation to 9,000 individuals and 1,200 legal entities. All digital ruble transactions for individuals are designed to be fee-free.

Phased National Rollout and Future Prospects

While the pilot program continues to expand, a comprehensive national launch of the digital ruble's payment functionality is officially confirmed for September 1, 2026. This rollout is planned as a phased strategy, with mandatory integration requirements for large banks and commercial merchants beginning in September 2026, extending to smaller businesses in subsequent years. Earlier, the Russian Central Bank had announced an acceleration and expansion of its digital ruble project, with a new phase set to commence on September 1, 2024, to encompass real transactions with a broader range of clients. The legal framework for the digital ruble was established with the passage of foundational legislation by the State Duma in 2023.