Putin Signed Digital Ruble Law Making a CBDC Possible in Russia – CoinDesk 7/24/23

Source: CoinDesk.com

Russia’s president Vladimir Putin signed the digital ruble bill into law today, allowing the country’s central bank to issue its own digital currency.

The digital ruble, which the Bank of Russia has long been mulling over, will be used for payments along with other methods, according to the new amendments to Russia’s Civil Code. The digital ruble accounts will be managed by the central bank, the law says. The bill passed its third, final hearing on July 11 and had been waiting for the president to be signed.

Digital ruble is a CBDC project the Bank of Russia has been working on since 2020, when the Bank of Russia published its first analytical report on the topic. Later, the regulator updated the report including the feedback from Russian banks and other financial market participants. The regulator announced it stared piloting the system with a number of Russian banks in February 2022, shortly before the country started a war in Ukraine.

Now, as Russia is heavily sanctioned by the U.S. and Europe, the digital ruble might become one of the ways to circumnavigate the massive financial restrictions imposed on the country by the West. The project initially was viewed by the Bank of Russia both as a tool against sanctions and a way to control how the government is spending money allocated for social projects.

According to the head of the parliament’s committee on financial markets Anatoly Aksakov, the digital ruble will also allow controlling and limiting the ways private citizen can spend them. For example, parents would be able to control on what their kids spend their pocket money, Aksakov told Parlamentskaya Gazeta in an interview earlier in July.