President Putin Approves a Digital Ruble
- The digital ruble will be effective from August 1, 2023.
- The Russian government does not expect a massive adoption of the new CBDC until 2025 or 2027.
- Russian lawmakers believe the CBDC could help improve the country’s economy and also help Russia navigate Western sanctions.
Official documents in Russia have confirmed that President Vladimir Putin signed the digital ruble into law on Monday, July 24, furthering Russia’s ambition for a central bank digital currency (CBDC). As per reports, the new law will be effected from August 1, 2023.
The digital ruble will serve as another payment option for Russians and will be overseen by the country’s central bank. The digital ruble however does not serve investment purposes. Interestingly, Russian citizens will not be forced to use the digital ruble.
According to Bank of Russia governor Elvira Nabiullina,
No one is going to force anyone into the digital ruble […] But we really hope that it will be more convenient and cheaper for both people and businesses, and they will start using it. This is a new opportunity.
While the digital ruble is a significant step in Russia’s push for a digital economy, Bank of Russia deputy governor Olga Skorobogatova revealed that the government does not anticipate massive adoption of the CBDC until 2025 or 2027.
Russian lawmakers showed remarkable speed in pushing forward policies for a CBDC but have thus far shown little interest in rolling out regulations for the broader crypto space.
The Bank of Russia has been developing the CBDC project since 2020 when it released its initial research paper on the subject. The financial regulator later amended the report to include comments from Russian banks and other players in the financial industry.
The Bank of Russia originally viewed the digital ruble project as both a way of avoiding sanctions and an instrument to monitor how the government is using funds designated for social programs. Furthermore, experts believe the digital ruble could be a plus for Russia’s economy. Russia could possibly leverage the digital ruble to avoid some of the financial restrictions caused by Western and European sanctions.
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