Russia Plans to Introduce Digital Ruble Amid Russia-Ukraine War

• The Russian Federation moves forward with its plans to introduce the digital ruble.
• The Federation Council would bring the legislation to approve the creation of the digital ruble on Wednesday.
• If approved and signed by President Vladimir Putin, the Bank of Russia would start the pilot program by the next month.

Russia is successfully moving forward with its plans to introduce its central bank digital currency (CBDC), the digital ruble, amid the dreadful Russian-Ukrainian war. As per a recent report, the Federation Council, Russia’s upper house of Parliament, would bring the legislation to approve the creation of the digital ruble, on Wednesday.

In February 2022, Russia officially launched the digital ruble trial, transferring the country’s first CBDC among citizens, as per the announcement of the Bank of Russia. The initial procedure of the trial enabled the users to open wallets on the digital ruble platform through a mobile application and make transactions using the CBDC.

Earlier this year, the Financial Market Committee of Russia, under the leadership of Chairman Anatoly Aksakov, submitted a bill on the issuance of the digital ruble to the State Duma. As per the words of Aksakov, the bill was intended to increase the availability, speed, convenience, and security of payments using digital rubles.

As per the latest report, the Bank of Russia would begin the pilot program by the next month, if the bill is passed and signed by President Vladimir Putin. The Bank intends to run a pilot project collaborating with the country’s lenders, letting individuals and institutions open a digital wallet on the central bank’s platform. While the companies are expected to pay a 0.3% fee for transactions with the digital ruble, individuals could perform the transactions at no cost.

Last week, a report hinted at the country’s plans to initiate the testing of the ruble currency’s digital version by August. A majority of the countries including India, Japan, and China, have initiated their endeavor to develop digital currencies.

Nikolay Zhuravlev, Deputy Chairman of the Russian Federation Council commented that the digital ruble is a potential way for easing cross-border payments. He stated:

In the current environment, it is important to have independent payment instruments and financial information channels that can be used in our trade with foreign partners.

Alexandra Prokopenko, a former adviser at the Russian central bank pointed out that the digital ruble “resembles a points system in the royalty program of the ‘Fortress Russia’ corporation,” adding that the digital currency would make transactions transparent in the territories annexed from Ukraine.”