Russia is set to launch its own central bank digital currency (CBDC), known as the digital ruble, in August. The project was approved by Russian President Vladimir Putin on Thursday, and the necessary amendments to Russia’s Civil Code have been made to allow the use of the digital ruble for payments. Starting from August 1, real citizens will be able to use the currency, which will be managed directly by the central bank instead of commercial banks.
The introduction of the digital ruble aims to provide a more convenient and cost-effective payment method for both individuals and businesses. According to Elvira Nabiullina, the governor of the central bank, the use of the digital ruble is optional. She expressed hope that people and businesses will find it more convenient and cheaper to use, presenting it as a new opportunity.
The Russian government has been exploring the concept of a digital ruble since October 2020. In February 2022, the system was piloted with Russian banks, and two weeks ago, the State Duma approved the new law allowing individuals to use the currency. The digital ruble will be programmable, allowing for the implementation of transaction limits and restrictions on how the currency can be spent.
This move by Russia sets it apart from Western nations like the United States and Canada, where the exploration of CBDCs is still ongoing. In fact, some politicians in these countries have criticized CBDCs for their potential to surveil and control citizens. Florida Governor Ron DeSantis, for example, referred to CBDCs as a tool for surveilling and controlling Americans. In contrast, Russia has already banned the use of private cryptocurrencies for payments within the country, only allowing their use for cross-border trade.
The launch of the digital ruble represents a significant step forward for Russia in the world of digital currencies. It will be interesting to see how the adoption of the digital ruble unfolds and whether it will have a positive impact on the country’s economy and financial system.
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