Vladimir Putin, the President of Russia, has ratified a law that introduces digital rubble, the country’s central bank digital currency (CBDC), according to an official government document published today (Monday). The approval comes after Russia’s upper and lower chambers passed a bill on the digital currency earlier this month.
Russia Eyes August for CBDC Pilot
Putin approved the introduction of digital rubble through amendments to Russia’s Civil Code, thereby validating the CBDC as a legitimate form of national currency. The amendments are expected to enter into force on August 1, 2023. However, certain provisions, including those related to bankruptcy and inheritance, will only come into enforcement in August next year.
Earlier, Russia indefinitely postponed a pilot testing of the digital rubble initially scheduled to run in April. The pilot was planned to go live in partnership with 13 local banks. However, with presidential approval now granted, the pilot, which will test the application of the digital currency in real-life transactions, is expected to go live next month.
According to the state-owned news agency, TASS, under the new law, a transaction in digital rubble is to be done through a special information system manned by the Bank of Russia. On top of this, the apex monetary authority will only accept the CBDC as a means of payment and money transfer.
Furthermore, the law provides that transfers and payments made using the digital currency will be free of charge for citizens but will attract a 0.3% fee when used by businesses, according to a local media outlet. On the contrary, the law makes no provision for operating a bank account based on the CBDC.
‘This Is a New Opportunity'
Earlier in the month, Elvira Nabiullina, the Governor of the Bank of Russia, told local media that the government will not force its citizens to adopt the digital rubble, noting that adoption of the CBDC will be voluntary.
“But we really hope that it will be more convenient and cheaper for both people and businesses, and they will start using it,” a local outlet, RIA News, quoted Nabiullina as saying. “This is a new opportunity.”
Russia’s progress with the digital rubble comes as the transcontinental country has been seeking an alternative to the international financial messaging system, SWIFT. The country, following its invasion of Ukraine, was hit with several economic sanctions by Western nations, including the exclusion of several of its banks from SWIFT.
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This article was written by Solomon Oladipupo at www.financemagnates.com.
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