Russia is inching closer to facilitating a widespread roll out of its CBDC, the digital ruble. A bill, that proposed the legalization of this CBDC has finally been signed into law by President Vladimir Putin. The country had begun accelerating research and development around CBDCs last year, after the country invaded Ukraine and the ensuing conflict between the two countries. At the time, several nations had imposed sanctions on Russian funds and assets stored in other countries, prompting the country to look for a way to sidestep the financial restrictions.
Signed into law by President Putin, the digital ruble bill ,via Cointelegraph) names the Bank of Russia as the source operator for the digital ruble CBDC. The law will be effective from August 1, as per the government document.
CBDCs — or central bank digital currencies — function like cryptocurrencies, but they are regularized and issued by the central banks. Not only does this smoothen the online payment systems, but also reduces the dependence on cash notes. The Central Bank of Russia had begun testing the digital ruble CBDC with real clients and with the use of smart contracts last year.
Once the digital ruble sees a wider roll out, Russian citizens will be able to process payments as well as instant money transfers via their digital wallets. Use of the CBDC will not be compulsory, and the government expects the currency to become more popular by 2027.
The bill that proposed the legalization of Russia’s CBDC was first passed by both of the country’s parliaments—the State Duma and the Federation Council, earlier this month.
A number of Russian banks were onboarded for the pilot trials of the CBDC last year, after feedback on its use cases were gathered from other participants of the financial market there.
The country may be looking to use its CBDC to facilitate the movement of funds internationally despite sanctions against Russia imposed by Europe and the US.
India, China, Japan, Hong Kong, Zimbabwe, and Australia are other nations that are working on introducing their respective CBDCs into their existing financial systems.