The recent move by the Russian Federal Assembly, notably the State Duma, propelling the digital ruble bill into law is an undeniable step toward a digital financial revolution.
The bill passed through the lower chamber successfully, and now, with President Vladimir Putin’s endorsement, it is poised to be a game changer. This new law, transforming Russia’s financial landscape, is set to take effect from August 1, 2023.
From its introduction to the State Duma in December 2022, the digital ruble bill underwent meticulous examination. Following amendments in June, it cleared the third reading in the lower chamber. Consequently, it received approval from the Federation Council, the upper chamber, before landing on the president’s desk. This momentous journey signals a pivotal shift in Russia‘s financial system.
Bank of Russia assumes the helm of digital Ruble infrastructure
The key player in this digital shift will be Russia’s central bank, the Bank of Russia. As the principal operator of the digital ruble infrastructure, it shoulders the responsibility for all stored assets. Significantly, the digital ruble is designed not as an investment instrument but primarily to facilitate payments and transfers.
Under the new law, individual customers will enjoy free transactions. However, corporate clients will incur a nominal fee, pegged at 0.3% of the payment amount. Hence, it is clear that the focus is to offer a new convenient payment system to the Russian populace.
Implications of the digital Ruble for traditional banks and retailers
The Russian central bank aims to test the digital ruble with real consumers as early as August 2023. Initially, the bank planned to collaborate with 13 local banks, including giants like Sberbank, for trial runs in April. However, with the new law in effect, the roadmap has been amended.
Besides being a payment and money transfer method, the digital ruble will be the third form of money alongside cash and non-cash rubles. Notably, the use of the digital ruble will not be compulsory. Individuals will be free to choose whether or not to adopt the CBDC.
Elvira Nabiullina, the governor of the Bank of Russia, voiced her expectations on adopting the digital ruble. When asked whether anybody would be forced into the digital ruble, she said,
“No one is.” We hope its reduced costs and increased efficiency will entice consumers and companies to adopt it. This is a renewed chance.”
Russian citizens gearing up for digital Ruble rollout by 2027
The news of the digital ruble comes amidst delays in the introduction of cryptocurrency regulation by Russian lawmakers. Anatoly Aksakov, a member of the State Duma, pledged to enact four pieces of legislation regulating the mining, taxation, and international settlement of cryptocurrencies. However, the future of these laws is still up in the air.
In conclusion, the digital ruble presents a new opportunity for the Russian financial system. With the convenience it promises, it is a significant stride towards a cashless society. However, its widespread acceptance remains to be seen. As the digital currency takes shape, the world watches with bated breath, waiting to see the effects of this financial revolution.