Introducing the Digital Ruble: Russia’s Central Bank Gets Ready for CBDCs

• A group of Russian lawmakers has submitted draft legislation on a digital ruble, a central bank digital currency (CBDC) minted by Russia’s monetary authority.
• The document suggests legislative changes meant to create the conditions for the introduction of the digital ruble, providing Russian citizens, businesses, and the state with access to fast, convenient, and low-cost money transfers.
• The proposed amendments to existing laws assign to the Bank of Russia the role of sole operator of the CBDC platform, secure the status of the digital ruble as a currency of the Russian Federation, and allow the central bank to process personal information.

A draft law devoted to the digital ruble has recently been filed with the State Duma, the lower house of Russian parliament. This document, which is sponsored by the Chairman of the Financial Market Committee Anatoly Aksakov and his colleagues, introduces rules determining how the new form of national fiat will be issued and amends a series of legal acts to facilitate its implementation.

The main purpose of the bill is to develop the necessary payment infrastructure for the digital ruble, providing Russian citizens, businesses, and the state with access to fast, convenient, and low-cost money transfers. To achieve this goal, the proposed amendments to existing laws assign to the Bank of Russia the role of sole operator of the CBDC platform. In particular, the law on “On the National Payment System” is supplemented with definitions pertaining to the CBDC, and the law “On Currency Regulation and Currency Control” secures the status of the digital ruble as a currency of the Russian Federation and defines CBDCs issued by the central banks of other nations as foreign currencies.

Changes to the Federal Law “On Personal Data” also enable Russia’s central bank to process personal information in order to support the digital ruble platform. According to the explanatory notes to the bill, choosing the Bank of Russia as the sole operator of the CBDC platform is intended to ensure stability and reliability of the system. It is also expected to provide additional protection to users, prevent fraud and increase the speed of transactions.

The introduction of the digital ruble is part of the Russian government’s efforts to modernize the country’s financial system and facilitate the adoption of new technologies in the banking sector. Russia is not the only nation exploring the potential of CBDCs. Central banks around the world have been researching the technology and are considering issuing their own digital currencies.