For Russian financial institutions to circumvent Western-backed economic sanctions since its invasion of Ukraine, Russian deputies are pushing for wholesale CBDC while the retail pilot gets underway.
As Russia prepares its digital ruble pilot, concerns arise over privacy and the CBDC's potential implications to the financial landscape, which may likely push back the project's full rollout.
Starting in 2025, business-to-business transactions involving the digital ruble will have a 15 rubles ($0.16) charge, while individuals will only have a 0.3% charge of the total value of the transaction.
Although Russia has said the digital ruble will be optional, banks want that embedded in legislation as they say their customers are wary of the upcoming state-backed digital currency.
Even though the use of the digital ruble remains voluntary, the Bank of Russia’s law on the CBDC is being criticized over its alleged lack of privacy rights.
Under the newly signed law, the Bank of Russia is tasked with storing digital ruble assets and will be the principal operator of the digital ruble infrastructure.
The CBDC bill, supporting the creation of a digital ruble pilot, amended certain parts of the Russian civil code and established the right of the central bank as the primary issuer of the CBDC.
First Deputy Governor of the Bank of Russia Olga Skorobogatova said the digital ruble project will advance in stages, modeled after China's digital yuan pilot.
Russia's CBDC pilot program was pushed back to July following the decision of the State Duma Committee to amend the digital ruble bill, which includes giving non-residents access to foreign banks.
The central bank confirmed that it had started the process for the development of a demo version to look into the viability of central bank-backed digital currencies.
India and Russia should take the lead in forming a financial relationship to ultimately create a new common currency, according to State Duma Deputy Chairman Alexander Babakov.