draft law to the Duma for the digital ruble

A few days ago, in Russia, the State Duma approved in the first reading a bill on the gradual introduction into circulation of the digital ruble.

IZ.ru (Izvestia) reported this, citing the minutes published on the official website of the lower house of parliament, related to the plenary session of the State Duma on May 22, during which a decision was made on the matter.

Russia: the draft law of the Duma for the digital ruble

The Duma is the parliament of Russia. 

During the plenary session on May 22, the State Duma approved in the first reading a new bill that requires banks to carry out transactions with the digital ruble and to use a universal QR code. 

The bill was presented by a group of senators and deputies, and aims to expand payments in digital rubles, as well as to introduce a universal code for the payments of goods, works, and services. 

If approved, this law will require both banks and retail outlets to implement the ability to pay in digital currency within three years.

Furthermore, the bill specifies that the transfer of digital rubles from individuals to legal entities will be carried out through a universal payment code, and if the law is approved, starting from January 1, 2026, operators who carry out money transfers will be required to provide customers with the details of the transfer, or a link to them in the form of a universal payment code.

Russia presents the digital ruble to the Duma

The digital ruble will be nothing more than the natively digital version of the Russian ruble, which is the legal tender currency of Russia.

Therefore, it will be in all respects a currency identical to the current rubles, except for the technical methods of custody and transfer. 

In light of this, it is obvious that just as there is currently an obligation in Russia to accept payments in rubles, a law is needed to also introduce the obligation to receive them in digital rubles, to ensure that this new method spreads. 

One of the major concerns of citizens regarding central bank digital currencies (CBDC) is that all digital transactions will be recorded on a database under the control of the central bank itself. Furthermore, since all instruments managed by intermediaries using fiat currency must perform KYC (the recognition of users’ identity), there is a risk that the central bank may become aware of all monetary transactions of all citizens using these digital currencies. 

The digital ruble will obviously be no exception, but on the other hand, Russian citizens, just like Chinese ones, are already widely and historically accustomed to strict control of their actions by the State. 

The timing

The hypothesis circulating is that the digital ruble will be put into circulation in Russia starting as early as next year. 

Izvestia reports that the president of the Financial Markets Committee of the State Duma, Anatoly Aksakov, stated that its launch has indeed been postponed at least until 2026, and that it will most likely not be operational before next summer. 

However, the deputy also noted that it makes no sense to delay the launch of the digital ruble for too long, because its infrastructure is already ready at the Central Bank of the Russian Federation, and it will be ready by July 1st at most of the major banks as well.

The Russian state therefore would like to impose the use of this digital fiat currency on its citizens as soon as possible, even though it is not certain that it will succeed. 

The Chinese Precedent

The only major state in the world that has already launched its own CBDC is China.

The launch took place several years ago, but the digital yuan has not achieved much success at all. 

Not only are citizens still probably too accustomed to using the traditional form of money, but since they know their State all too well, it is also likely that they do not trust much in using a CBDC. 

The greatest fear, in fact, is that of being “spied on” by the central bank, which is a state body that works closely with the government. 

In Russia, however, the power of the government over the people seems even greater, so it cannot be ruled out that, unlike the Chinese one, the Russian government may eventually succeed in imposing the use of its CBDC. 

In the USA, however, the project of a CBDC has been effectively shelved, at least temporarily, while in the EU the digital euro project is still ongoing, although a precise launch date has not yet been decided.