In a momentous move towards a digital future, President Vladimir Putin has given his official approval to the digital ruble bill, paving the way for Russia’s central bank digital currency (CBDC) to become a reality from August 1, 2023, according to the officials. The digital ruble is expected to revolutionize financial transactions, offering convenience and cost-effectiveness to individuals and businesses.
With the new legislation in place, the Russian central bank will launch the first CBDC pilot program in August, enabling real consumers to engage in digital ruble transactions. The central bank will act as the primary operator, holding responsibility for managing all stored digital assets related to the digital ruble, which is designed for payments and money transfers, not for investment purposes.
Bank of Russia governor, Elvira Nabiullina, emphasized that using the digital ruble will be voluntary, and citizens will not be forced to adopt it. The government’s focus is to provide a more convenient and cost-effective alternative for people and businesses, encouraging voluntary participation rather than a mandated transition.
The digital ruble will join cash and non-cash rubles as a third form of money in Russia. However, officials from the Bank of Russia do not anticipate widespread adoption before 2025 or even 2027, allowing ample time for citizens and businesses to adapt to the new system.
The digital ruble bill’s journey began in December 2022 and successfully passed through the State Duma and the Federation Council (Senate), culminating in President Putin’s approval.
On July 12, 2023, Russia’s central bank moved closer to implementing the digital ruble Central Bank Digital Currency (CBDC) project. The State Duma passed the digital ruble bill in its third reading on July 1. The bill had defined key terms and set guidelines for the CBDC ecosystem, with the Bank of Russia designated as the primary operator responsible for ensuring asset security.
Subsequently, on July 19, 2023, The Russian Federation Council discussed a law to approve the digital ruble. As part of the project, the Bank of Russia had planned to collaborate with 15 domestic banks, enabling individuals and businesses to create digital wallets on the central bank’s platform, accessible through any Russian bank. Individuals can transact with the digital ruble for free, while companies will incur a small fee of 0.3%, according to the bank’s guidelines.
In a recent report by Todayq news on July 14, it was stated that Russian Prosecutor-General, Igor Krasnov, has urged cooperation between the Russian and Chinese central banks in the regulation of central bank digital currencies (CBDCs). He emphasized that such collaboration would be in the common interest of both countries, helping to create a legal framework to prevent criminals from misusing CBDCs. Their willingness to work together indicates the growing importance of CBDCs in international trade and finance, setting a potential model for future collaborations.
While advancing in CBDC development, Russia has encountered delays in finalizing cryptocurrency regulations. State Duma official Anatoly Aksakov pledged to progress four crypto-related bills but has faced challenges in pushing them forward. With the digital ruble on the horizon, Russia is poised to embrace a digital revolution in its financial landscape, providing new opportunities for efficient and modern economic participation for its citizens and businesses.