The Russian Central Bank says it may look to “mark” or “color-code” digital ruble tokens to help it track CBDC transactions.
Per Tass, the bank said it would “consider the possibility” of issuing super-traceable tokens.
But, speaking at a financial forum, the bank’s Deputy Governor Alexei Zabotkin said the bank was “not currently” developing “color-coded” coins.
Zabotkin added that the matter would be discussed at a “later stage of the pilot.”
However, the Deputy Governor explained that “coloring” digital ruble tokens would allow the bank and other parties to “track the use of funds allocated for certain purposes, for example, in the distribution of state budgets.”
Zabotkin claimed that the idea had been “discussed during the coin’s concept creation phase.”
The Russian Central Bank in Moscow, Russia. (Source: Kuba [CC BY 3.0])
Could Russian Central Bank Really ‘Mark’ CBDC Tokens?
The bank appears aware that talk of traceability does not appeal to everybody, and could turn skeptical Russians away from the coin.
Zabotkin was quick to add:
“Restrictions on the use of money reduce its liquidity. Large restrictions on what [citizens] can spend a particular unit of money on makes that money less valuable compared to money they can spend on whatever they like.”
The bank official added that “color-coding”-related CBDC “functionality” needed “to be addressed be very carefully.”
He said that the bank was still only speaking about the matter in “theoretical contexts.”
The news agency Interfax noted that the bank could seek to “mark” digital ruble tokens used in certain types of smart contracts, and pointed out that the bank has been mooting the use of CBDC smart contracts since 2021.
The news agency wrote, with reference to the bank’s white paper:
“One of the […] options for using smart contracts could be the marking of digital rubles. This would allow [the issuer] to set the conditions for their spending (for example, determining which specific categories of goods and services that they can be used to purchase.”
Such coins could be “tracked” through their “entire chain of passage” through the Russian financial system, the agency added.
Late last week, one of the country’s most powerful lawmakers called on the Central Bank to scrap buying caps for foreigners who want to buy digital yuan tokens.
The digital ruble pilot got underway almost exactly a month ago, with 11 cities nationwide taking part.