Today, President Vladimir Putin of Russia has enacted the digital ruble bill into law, granting the country’s central bank the authority to issue its own digital currency.
The digital ruble, a concept the Bank of Russia has been considering for some time, will be used for transactions in addition to other payment methods, as outlined in the newly amended Russia Civil Code. The management of digital ruble accounts will fall under the purview of the central bank. After passing through its third and final hearing on July 11, the bill awaited the president’s signature.
The Bank of Russia has been working on the CBDC project since 2020, which commenced with the publication of the first analytical report on the subject. Subsequently, the regulator updated the report, incorporating feedback from Russian banks and other financial market participants. A pilot program for the system was initiated with several Russian banks in February 2022, shortly before the country’s involvement in the Ukraine conflict.
In light of the extensive sanctions imposed on Russia by the U.S. and Europe, the digital ruble might serve as a means to navigate around the significant financial restrictions levied on the nation by the Western countries. Originally conceived as a tool to counter sanctions and monitor the government’s expenditure on social projects, the project holds the potential to address these challenges.
