Russia is set to make significant strides in the world of digital currency as President Vladimir Putin signed the digital ruble bill into law, according to an official government document released on July 24. This move signals the country’s determination to join the growing trend of central bank digital currencies (CBDCs) and places Russia on track to launch its first CBDC pilot in August.
The approved digital ruble law is scheduled to take effect on August 1, 2023, with only one rule remaining to be enforced, specifically Article number three. This article encompasses amendments to various Russian federal laws, including those pertaining to bankruptcy and inheritance, and it is expected to take effect in August 2024.
With the legislation in place, the Russian central bank will be granted the authority to initiate the inaugural CBDC pilot with real consumers in August. Initially, the government had planned to roll out trials in April, collaborating with 13 local banks, including major players like Sberbank. However, the official launch was postponed until August.
The digital ruble, as defined in the newly signed law, will be operated primarily by Russia’s central bank, which will also bear the responsibility for safeguarding all the stored assets associated with the CBDC. Designed primarily for payment and money transfer purposes, the digital ruble is not intended for investment activities.
Bank of Russia governor Elvira Nabiullina emphasized that the use of the digital ruble would be a voluntary choice for individuals and not mandatory. She stated on July 24 that no one is going to force anyone into the digital ruble but really hope that it will be more convenient and cheaper for both people and businesses, and they will start using it.
The digital ruble is poised to become the third form of money in Russia, alongside cash and non-cash rubles, providing citizens with an alternative payment option. However, officials anticipate that mass adoption of the CBDC within the country will not occur until 2025 or even 2027, as revealed by Bank of Russia deputy governor Olga Skorobogatova.
Cryptocurrency Regulation Remains Delayed Despite Russia Approving Digital Ruble Bill
The approval comes after months of deliberation and marks a pivotal step in the country’s journey towards adopting a Central Bank Digital Currency (CBDC). Subsequently, on July 19, the Federation Council also gave its seal of approval to the bill, further solidifying the legislative process. Notably, the digital ruble bill had been initially registered in December 2022, indicating the government’s intent to explore the realm of digital currencies.
The swift advancement of the CBDC legislation contrasts with the postponement of cryptocurrency regulations in the country. Russia’s lawmakers have been grappling with the issue of cryptocurrency regulation for some time now, and a series of delays have hindered progress in this area.
As recently as May, Anatoly Aksakov, a State Duma official, had pledged to introduce four bills addressing various aspects of cryptocurrencies, including regulation related to crypto mining, taxation, and international settlement crypto. However, these bills have seen limited progress since their announcement, leading to uncertainty within the crypto community in Russia.
