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Russia's President, Vladimir Putin, has officially enacted the digital ruble bill today, granting authorization to the nation's central bank for the issuance of its own digital currency.
The long-contemplated digital ruble, proposed by the Bank of Russia, is set to become a valid payment method alongside other existing options, as per the recent amendments to Russia's Civil Code. The management of digital ruble accounts will be entrusted to the central bank, as stated in the new law. After successfully passing its third and final hearing on July 11, the bill has been awaiting the president's signature before it can be enacted into law.
The Digital Ruble, a Central Bank Digital Currency (CBDC) initiative, has been under development by the Bank of Russia since 2020, marked by the publication of its initial analytical report on the subject. Subsequently, the regulator incorporated feedback from Russian banks and other participants in the financial market, updating the report accordingly. In February 2022, the regulator made a significant stride by commencing the pilot phase of the system with several Russian banks, coinciding closely with the outbreak of the war in Ukraine.
Now, with Russia facing extensive sanctions from the U.S. and Europe, the digital ruble has emerged as a potential means to navigate the significant financial restrictions imposed on the country by Western nations. The project was initially conceived by the Bank of Russia with dual purposes: to serve as a countermeasure against sanctions and to exercise better control over the government's expenditure for social projects.
In an interview earlier this July, Anatoly Aksakov, the head of the parliament's committee on financial markets, revealed that the introduction of the digital ruble would enable enhanced control and restriction over how private citizens can utilize their funds. For instance, parents would have the ability to oversee and manage how their children spend their pocket money, as stated by Aksakov in his discussion with Parlamentskaya Gazeta.
