Russian President Vladimir Putin is moving ahead with a central bank digital currency (CBDC), signing the digital ruble bill into law on July 24, according to an official government document. With Putin’s official approval, the digital ruble law is scheduled to take effect from Aug. 1, 2023, with all but one rule ready to be enforced. However, unlike plans for CBDCs elsewhere, Russia’s digital ruble will be voluntary.
Article number three — which includes amendments to several Russian federal laws, including those related to bankruptcy and inheritance — is expected to take effect from August 2024.
In a significant move, the Russian government has officially granted the Russian central bank the authority to commence the first pilot of its Central Bank Digital Currency (CBDC) with real consumers, slated for August.
The initial trials, which were initially planned to be rolled out in April, will now see active participation from 13 local banks, including major players like Sberbank.
As per the new law, the digital ruble infrastructure will be operated by the Russian central bank, which will also bear the responsibility of safeguarding all the assets held within the system.
It is important to note that the digital ruble is specifically intended for use as a secure and efficient payment and money transfer method and will not serve any investment purposes.
Functioning as the third form of money, alongside cash and non-cash rubles, the digital ruble is expected to offer greater convenience to the financial ecosystem. However, it has been made clear by Bank of Russia governor, Elvira Nabiullina, that its usage will be entirely voluntary for Russian citizens.
Individuals will have the freedom to decide whether or not they wish to embrace the CBDC’s potential benefits.
This declaration was made by Nabiullina on July 24, assuring citizens that they will not be compelled to adopt the digital ruble against their will. She said:
“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.”
According to Bank of Russia deputy governor Olga Skorobogatova, the government doesn’t expect mass adoption of the digital ruble in Russia before 2025 or even 2027.
The news comes soon after Russia’s State Duma — the country’s lower house of parliament — passed the digital ruble bill in the third and final reading on July 11. The Federation Council subsequently approved the bill on July 19. According to official records, the digital ruble bill was initially registered in December 2022.