Russia’s State Duma has been presented with a draft law seeking to make new proposals related to the launch of a central bank digital currency (CBDC), the digital ruble.
The bill was submitted by Anatoly Aksakov, head of the State Duma Committee on Financial Markets. The bill seeks to make the Bank of Russia the “sole operator” of the digital ruble to the exclusion of other entities.
“The purpose of the bill is to develop the payment infrastructure in terms of expanding the use of digital technologies by citizens, businesses, and the state, increasing the availability, speed, convenience, and security of settlements while reducing costs through legislative consolidation of approaches to the transfer of digital rubles,” the bill’s explanatory note read.
The bill provides that the central bank will maintain the digital wallet for storing the digital ruble and the administration of the CBDC platform. Other key provisions in the draft law include the insertion of definitions of terms related to CBDCs to eliminate any ambiguities that might arise from their use.
Russian lawmakers are also tweaking the provisions of other laws to bring them in line with the new bill. A proposal was brought before the house to amend the “On Enforcement Proceedings,” “On currency regulation and currency control,” and “On Personal Data” laws which would legalize the issuance and collection of the digital ruble.
The amendments are also poised to give the Bank of Russia wider powers to collect personal details without the need to seek the consent of the users. While the proposed amendment would cement the position of the central bank as the sole regulator of the digital ruble, critics have described the move as a violation of the privacy rights of individuals.
The state of Russia’s CBDC development
Russia’s CBDC development is in frantic mode, primarily driven by sanctions imposed on the country since its invasion of Ukraine in 2022. The country’s administrators have hinted that the digital ruble could go live as early as 2024, with a target to be deployed in cross-border payments with its allies.
“The topic of digital financial assets, the digital rouble, and cryptocurrencies are currently intensifying in society, as Western countries are imposing sanctions and creating problems for bank transfers, including in international settlements,” Aksakov said.
With trials underway, commercial bank VTB has clinched the title of being the first Russian banking institution to include a test version of the digital ruble in its banking app. Over a dozen financial institutions have joined the digital ruble pilot amid wide speculation that the CBDC will be used for offline and online payments.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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