Russia Prepares Digital Ruble

Due to its conflict with Ukraine, Russia is preparing to introduce the Digital Ruble, joining other nations in experimenting with electronic currency.

On Wednesday, July 19, the Federation Council, the upper house of the Russian parliament, will authorize the creation of a national digital currency.

As soon as President Vladimir Putin signs the bill, the Bank of Russia could begin testing the Digital Ruble CBDC as early as next month.

The Bank of Russia is launching a pilot initiative with 15 Russian banks to offer digital wallets to businesses and individuals.

These funds will be accessible via any Russian financial institution. Individuals can conduct Digital Ruble transactions for free, while businesses will be charged a 0.3% fee, per the bank’s instructions.

Following the implementation of sanctions by the US and its allies, which disconnected Russian banks from the global financial system, the Bank of Russia is moving forward with the CBDC initiative.

As a result of these sanctions, foreign institutions have adopted stricter payment policies for Russia.

As a result, Russia intends to lessen the impact of sanctions by expanding its trade in national currencies with countries such as China and India, which have adopted a more neutral stance on the conflict.

Earlier this month, Nikolay Zhuravlev, vice chairman of the Federation Council, 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”.

However, Alexandra Prokopenko, a former adviser at the Russian central bank, noted that these expectations may be overly optimistic at this time, as the Digital Ruble would need to be connected to other countries’ currency platforms for international transactions to occur.

However, there are currently no signs of progress in that direction.

Prokopenko stated, “So far, the digital ruble resembles a points system in the loyalty program of the ‘Fortress Russia’ corporation,” which could make transactions within the country more convenient.

” It could also make transactions more transparent in the territories annexed from Ukraine, where everything is currently conducted in cash.”

Previously, Russia intended to establish a national cryptocurrency exchange to facilitate cryptocurrency trading. However, they have temporarily abandoned the proposal.