Russia is progressing with its central bank digital currency (CBDC). President Vladimir Putin has endorsed the digital ruble bill, signing it into law on July 24. As a result of this approval, the digital ruble law is officially set to take effect starting from August 1, 2023.
The digital ruble will serve as an additional form of the Russian national currency. It will run alongside the existing cash and non-cash forms.
This development means that the Russian ruble will exist in three different forms. This includes physical cash, non-cash transactions (such as electronic transfers and online payments), and the newly introduced digital version.
The digital ruble will primarily function as a medium for payments and transfers. However, opening a bank account using digital rubles or obtaining a loan denominated in digital rubles will not be possible.
The recently passed legislation now grants the Russian central bank the authority to conduct the first CBDC pilot involving real consumers. Earlier, the government had planned to initiate trials in April. It was to collaborate with multiple local banks, including major institutions like Sberbank.
Russia’s Central Bank To Be The Principal Operator Of Digital Ruble
According to the newly enacted law, Russia’s central bank will assume the role of the principal operator for the digital ruble infrastructure. It will be responsible for safeguarding the stored assets.
Additionally, individuals or entities not operators or participants in the digital ruble platform, are prohibited from using the phrase “digital ruble platform” for their benefit. This also includes banning any related words and expressions in their advertising.
Elvira Nabiullina, the Bank of Russia governor, has stated that Russian citizens will not be obligated to use the CBDC. The usage of the digital ruble will be entirely voluntary. The decision to adopt the CBDC will rest with the individuals.
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.
Provisions For The Inheritance Of Digital Rubles
The document outlines provisions for the inheritance of digital rubles. It allows individuals to pass on their rights to these digital assets through testamentary dispositions or wills. The Russian government will establish the process and rules for issuing such orders in collaboration with the Bank of Russia.
This ensures that digital rubles can be transferred or inherited according to the legal framework set by the authorities. It allows for adequately managing and distributing these digital assets during a person’s passing.
However, the government does not anticipate widespread adoption of the digital ruble anytime soon. Mass adoption is not expected to happen before 2025 or possibly even 2027, as stated by Bank of Russia deputy governor Olga Skorobogatova.