Russia’s Digital Ruble Bill Advances

The digital ruble, a central bank digital currency (CBDC) project in Russia, is one step closer to becoming a reality.

The State Duma, the lower house of the Federal Assembly of the Russian Federation, passed the digital ruble bill in its third reading on July 11.

The legislation now moves to the Federation Council, the assembly’s upper chamber, and, if passed, to the president’s desk.

The bill, which was most recently revised at the end of June, establishes the legal definitions of “platform,” “participants,” and “users,” as well as the general guidelines for the CBDC ecosystem.

Within the existing framework, the Bank of Russia (BoR), the central bank of Russia, will become the primary operator of the digital ruble infrastructure. Additionally, it is responsible for all stored assets.

According to the BoR, the primary purpose of the CBDC is to serve as a payment and transfer method.

Consequently, its customers will be unable to open savings accounts. As highlighted by the BoR, payments and transfers would be free for individuals and cost 0.3% of the payment amount for businesses.

The bill was introduced to the State Duma in December 2022, and its first reading was approved in March 2023.

In February, a subsidiary of the leading Russian government-owned gas company, Gazprombank, warned about the potential risks to banks from the rapid transition to digital currency.

In five years, the Russian branch of McKinsey estimated that traditional banks could incur losses of approximately $250 billion ($3.5 billion).

Likewise, the consulting firm estimated retailers’ annual profits to be $1.1 billion.

In a recent interview, the deputy chairman of the central bank, Olga Skorobogatova, announced that by 2027, all Russian citizens will have access to the digital ruble. Between 2023 and 2024, a pilot program will test CBDC.