As sanctions continue, Russia will start developing its CBDC settlement system in the first quarter.

This coming quarter, the central bank of the country will start looking into two different potential cross-border CBDC settlement models.

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

According to a report that was published on January 9 by a local media outlet called Kommersant, the plans to move forward with Russia's digital ruble are expected to come in the first quarter of 2023. Russia's central bank will study two possible cross-border settlement models before moving forward with the plans.

In the first version of the model that has been suggested, different countries will integrate their CBDC systems by entering into separate bilateral agreements with Russia.

Each agreement would be crafted to ensure that the conversion and transfer of assets between the countries would be conducted in a manner that is compliant with the rules outlined in the other agreements.

The second, more complicated model suggests establishing a single hub-like platform on which Russia and other countries can interact with one another, sharing common protocols and standards to make it easier for connected countries to make payments to one another.

Roman Prokhorov, the head of the board of directors for the Financial Innovations Association (AFI), expressed his opinion that the first model was less promising for bilateral interactions between countries but was easier to implement. While the first model was simpler to implement, the second model was more complex.

The other choice was considered to be more "advanced," and its proponent considered the possibility of implementing an initial two-way system. He viewed China as the most likely partner in this scenario due to the country's "technological and political readiness."

According to reports from the month of September, Russia's plans to use its digital ruble for settlements with China are reportedly set to take place sometime in 2023.

Others, however, are of the opinion that Russia's CBDC play will not be hampered by technological limitations, but rather by political ones.

Alexey Voylukov, the vice president of the Association of Banks of Russia, stated that the introduction of a digital ruble will not change or improve the global political situation of Russia, and that trials for the CBDC platform can only be undertaken with countries that are friendly with the Russian government and are technologically ready. He also stated that the trials for the CBDC platform can only be undertaken with countries that are friendly with the Russian government.

Previously, the Bank of Russia had stated that it intended to launch its digital ruble by the year 2024, with all banks and credit institutions being connected to the platform that is maintained by the CBDC.

Since Russia began a full-scale invasion of Ukraine in late February 2022, which marked an escalation in the conflict between Russia and Ukraine, Russia has been subjected to an increasing number of economic and trade sanctions.

Since then, it has investigated and contemplated various means of evading the sanctions, such as the possibility of the country's central bank considering the use of cryptocurrencies "only to support foreign trade."

In September, the Bank of Russia and the Ministry of Finance reached a consensus on a rule that will enable Russian citizens to send payments across international borders using cryptocurrencies.