- Putin signs digital ruble into law, which will take effect on August 1, 2023.
- The Russian Civil Code has been amended to include the digital ruble in its outlines.
- The Central Bank of the Russian Federation will enable the transfer of digital rubles for account holders.
Russia has officially embraced the digital ruble as a central bank digital currency (CBDC). President Vladimir Putin has signed the digital ruble bill into law, which will take effect on August 1, 2023.
A Voluntary Choice for Citizens
Unlike conventional currency, the digital ruble will not be imposed on Russian citizens; its adoption remains a voluntary choice for individuals and businesses. To pave the way for the digital ruble’s integration, the Russian Civil Code underwent substantial amendments.
In Part One of the Civil Code, Article 128, which addresses Objects of Civil Rights (cash, paper securities, property rights, and protected results of intellectual activities), now explicitly includes “digital rubles” as a form of non-cash funds, making it a legitimate means of payment within the country.
Correspondingly, Article 140, paragraph 1, which states, “The rouble shall be the legal means of payment, which shall be accepted by its face value on the entire territory of the Russian Federation,” now recognizes payments in digital rubles as valid transactions.
Part Two of the Civil Code further solidifies the digital ruble’s role in the financial system. Article 845, which outlines that a bank must accept and enter monetary assets into a holder’s account once it is open, now mentions digital rubles as a “means of payment” and clarifies the contractual relationships related to these digital assets.
Part Three of the Civil Code introduces the Bank of Russia as the entity responsible for managing digital ruble accounts. It also sets guidelines for testamentary dispositions of digital rubles, ensuring smooth transfers to heirs and beneficiaries. Testamentary dispositions refer to the legal arrangements and instructions made by an individual in their will regarding the distribution of their assets and property after their death.
CBDC Pilot Program
With the new legislation in place, the Russian central bank is gearing up to launch the first CBDC pilot with real consumers in August. The pilot program aims to gauge the practicality and efficiency of the digital ruble in everyday transactions. Notably, the government anticipates a gradual adoption curve, with mass usage likely to pick up after 2025 or 2027.
While Russia embraces the digital ruble, it has been cautiously delaying the introduction of comprehensive cryptocurrency regulation. The focus has been solidifying the CBDC framework before addressing the complexities of cryptocurrencies. Nevertheless, the State Duma promises to pass relevant bills related to crypto mining, taxation, and international settlements.
Russia’s adoption of the digital ruble marks a significant milestone in its financial evolution. With the Civil Code amendments in place and the CBDC pilot on the horizon, the nation is poised to reap the benefits of an efficient digital currency system.
As Russia embraces this new era of finance, its cautious approach toward cryptocurrency regulation reflects a prudent balancing act between innovation and stability. The coming years will reveal how the digital ruble transforms the financial landscape, offering potential convenience and cost-effectiveness for businesses and individuals.