Lawmakers in Russia are scrutinizing the legal framework that will govern the central bank digital currency (CBDC) in the country, resulting in several sweeping changes to the draft bill.
The Committee on the Financial Market of the State Duma has made several proposals to the bill after its first hearing, state-owned media outlet Interfax reported. The changes range from debt operation, the central bank’s participation, and the access of the digital ruble to foreigners.
Ahead of the second reading, the committee members are looking to bar the Bank of Russia from participating in the capital of organizations involved in the CBDC project. Additional responsibility for the central bank is proposed to include reporting requirements to the National Financial Council to comply with existing anti-money laundering (AML) rules.
“The prepared bill specifies that the regulator will need to ensure the implementation of measures to encrypt the information contained on the digital ruble platform about employees of the Federal Security Service, about persons in respect of whom state protection measures are being implemented,” the report read.
Another area facing sweeping changes is the use of the digital ruble by foreigners, with the Committee seeking to expand access options for this class of users. The new proposal suggests that non-residents can access the digital ruble via foreign banks, provided the financial institutions participate in the pilot program.
The revised bill includes a clause from the Committee that provides a distinction between a debtor’s funds in his bank account and digital rubles in a wallet for the purpose of debt enforcement. Before their changes, the legal department of the State Duma had voiced dissatisfaction over the initial iteration of the bill on the grounds that it was inconsistent with existing debt recovery law.
The amendments were extended to advertisements with only participants in the pilot, and the central bank will be allowed to promote the CBDC with the phrase “digital ruble platform.”
A botched start
Russia’s central bank and Finance Ministry agreed to accelerate the development of its CBDC, scheduling a pilot for April 1. However, the launch state for the study was pushed back over the inability of the legislature to agree on a regulatory framework.
Anatoly Aksakov, head of the Duma Committee on Financial Markets, expects a regulatory framework before the end of July. Upon launch, 13 financial institutions are expected to tinker with creating digital wallets and transfers for retail use.
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