Russian parliament passes digital ruble bill

The Russian Federation’s central bank digital currency (CBDC) project, known as the digital ruble, has taken a significant step towards becoming a reality. On July 11, the Russian Federal Assembly’s lower chamber, the State Duma, passed the digital ruble bill on its third reading. The law will now be sent to the Federation Council, the assembly’s upper chamber, for approval before being sent to the president’s desk for final approval.

The bill, which underwent its latest amendment at the end of June, establishes legal definitions for key terms such as “platform,” “participants,” and “users,” and provides general guidelines for the CBDC ecosystem.

Under the current framework, the Bank of Russia (BoR), Russia’s central bank, will serve as the primary operator of the digital ruble infrastructure and will assume responsibility for safeguarding all stored assets. The primary objective of the CBDC, as outlined by the BoR, is to function as a payment and transfer method. Consequently, users will not be able to open savings accounts. The BoR emphasizes that individual customers will enjoy free payments and transfers, while corporate clients will incur a fee equivalent to 0.3% of the payment amount.

The bill was introduced in the State Duma in December 2022 and passed its first reading in March 2023. In February, a subsidiary of Gazprombank, a leading Russian government-owned gas company, raised concerns about potential risks for banks in the event of a rapid transition to digital currency. According to estimates from McKinsey’s Russian branch, traditional banks could face losses of approximately 250 billion rubles ($3.5 billion) over a five-year period due to CBDC implementation, while retailers could see annual profits of $1.1 billion.

In a recent interview, Olga Skorobogatova, the deputy chairman of the central bank, stated that the digital ruble will be widely available to all Russian citizens by 2027. Between 2023 and 2024, the CBDC will be tested in a trial program.