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Russia advances in the CBDC race as Putin signs digital ruble bill into law

TL;DR

  • Russian President Vladimir Putin has signed into law a bill that paves the way for the creation of a Central Bank Digital Currency (CBDC), the digital ruble.
  • The law, which comes into effect on August 1, 2023, allows the Bank of Russia to issue the digital ruble, which will be used alongside cash and non-cash rubles.
  • The use of the digital ruble will be voluntary, and the Bank of Russia does not expect mass adoption before 2025 or 2027.

Russian President Vladimir Putin has signed the digital ruble bill into law, marking a significant step towards the country’s central bank issuing its own digital currency, according to a document released by the Russian government.

The law, signed on July 24, 2023, will officially come into effect on August 1, 2023. This development follows the bill’s passage through both the lower and upper parliaments, with the State Duma and the Federation Council approving it on July 11 and July 19, respectively.

The digital ruble, a project that the Bank of Russia has been contemplating since 2020, will be used for payments alongside other methods, as per the new amendments to Russia’s Civil Code. The central bank will manage the digital ruble accounts, and the currency is expected to function as the third form of currency in the country, complementing cash and non-cash rubles.

The future of the digital ruble

The digital ruble is not intended for investment but rather as a means of payment and money transfer. The Bank of Russia, which will oversee all stored assets, will serve as the primary operator of the digital ruble infrastructure. The first pilot of the central bank digital currency (CBDC) involving actual consumers will officially be launched in August, following the new legislation. This pilot program was initially planned to launch in April with 13 local banks, including powerhouses like Sberbank.

Elvira Nabiullina, the governor of the Bank of Russia, has emphasized that the use of the CBDC will not be mandated for Russian citizens.

“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.”

Elvira Nabiullina, the governor of the Bank of Russia,

However, the government anticipates mass adoption of the CBDC in 2025 or even 2027, according to Olga Skorobogatova, the deputy governor of the Bank of Russia. Despite this, the digital ruble could potentially become a tool to circumnavigate the massive financial restrictions imposed on the country by the West, especially as Russia faces heavy sanctions from the U.S. and Europe.

The signing of the digital ruble bill into law marks a significant milestone in Russia’s journey toward digital currency, following in the footsteps of its neighbor, China, which is significantly ahead with its digital Yuan project.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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