Russia’s upper house of parliament will imminently pass legislation to authorize the commencement of pilot tests for the Digital Ruble.
Amidst international isolation over its conflict with Ukraine, Russia is readying itself to introduce the Digital Ruble, following in the footsteps of other countries exploring the realm of electronic money.
On Wednesday, July 19, Russia’s Federation Council, the upper house of Parliament, will pass legislation approving the creation of the national digital currency, the Digital Ruble. Once signed into law by President Vladimir Putin, the Bank of Russia is expected to commence tests of the Digital Ruble central bank digital currency (CBDC) as early as next month.
The Bank of Russia is collaborating with 15 Russian banks to launch a test program for digital wallets aimed at individuals and businesses. These wallets will be accessible through any Russian bank, allowing individuals to conduct transactions with the Digital Ruble for free, while companies will incur a 0.3% fee on their transactions, according to the bank’s guidance.
Digital ruble to help Russia combat economic challenges
The Bank of Russia is progressing with the CBDC project due to the sanctions imposed by the US and its allies, which led to the disconnection of Russian banks from the global financial system. In response to these sanctions, foreign banks have adopted stricter policies regarding payments from Russia.
In light of the sanctions’ impact, Russia intends to mitigate their effects by enhancing trade in national currencies with countries like China and India, which have adopted a more neutral position on the conflict. Nikolay Zhuravlev, the deputy chairman of the Federation Council, emphasized the importance of having independent payment instruments and financial information channels to be utilized in trade with foreign partners in the present circumstances.
Digital Ruble’s International Prospects Uncertain
Alexandra Prokopenko, a former adviser at the Russian central bank, raises doubts about the Digital Ruble’s international viability, as it would require connections with other countries’ currency platforms for cross-border transactions.
Currently, the Digital Ruble resembles a loyalty program within Russia, providing convenience and transparency for transactions inside the country. Russia has also abandoned plans for a national crypto exchange, further clouding the future of its crypto trading ambitions.
Important:Ā Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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