- July 27, 2023
- Posted by: [email protected]
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Russia is taking significant strides towards establishing its central bank digital currency (CBDC) as President Vladimir Putin signed the digital ruble bill into law on July 24, as indicated by an official government document. The legislation is set to come into effect on August 1, 2023, with all but one rule ready for implementation.
The new law grants the Russian central bank the authority to conduct the first pilot of the digital ruble with real consumers in August. Previously, the government had planned trials in collaboration with 13 local banks, including major players like Sberbank, slated to begin in April.
As per the newly enacted law, the digital ruble will serve as a payment and money transfer method and will not be intended for investment purposes. It is intended to coexist as a third form of money alongside cash and non-cash rubles. However, the use of the digital ruble will be entirely voluntary for Russian citizens, as emphasized by Bank of Russia governor Elvira Nabiullina. She stressed that no one will be compelled to use the CBDC but expressed hope that it will be more convenient and cost-effective for individuals and businesses, thereby encouraging its adoption.
Bank of Russia deputy governor Olga Skorobogatova mentioned that mass adoption of the digital ruble in Russia is not anticipated before 2025 or possibly even 2027. This suggests that the implementation process will be gradual, allowing individuals and businesses ample time to familiarize themselves with the new digital currency system.
The approval of the digital ruble law comes after Russia’s State Duma, the lower house of parliament, passed the bill in its third and final reading on July 11. Subsequently, the Federation Council approved it on July 19. Notably, the digital ruble bill was registered in December 2022, indicating a relatively swift legislative process.
While making strides in CBDC legislation, Russian lawmakers have continued to postpone the introduction of cryptocurrency regulations, despite promises to pass four bills concerning crypto mining, taxation, and international settlement crypto by State Duma official Anatoly Aksakov in May. Progress on these bills seems to have been limited, with delays continuing to hinder their enactment.
As the digital ruble prepares for its debut, Russia is poised to enter a new era of digital financial innovation. The voluntary nature of its usage may ease concerns about the currency’s forced adoption, allowing individuals and businesses to embrace this new opportunity on their own terms. However, its success and widespread adoption will ultimately depend on factors such as convenience, cost-effectiveness, and public trust in this new form of currency.
