Russian Parliament Adopts Law on Digital Ruble

The project of the Russian central bank’s digital currency (CBDC), the digital ruble, has come a step closer to reality. On July 11, the lower house of the Federal Assembly of the Russian Federation, the State Duma, adopted the law on the digital ruble in its third reading. The law now moves to the upper house of the assembly, the Federation Council, and if adopted, will go to the president’s desk.

The bill, which was last amended at the end of June, establishes legal definitions for the platform, participants, and users, as well as general guidelines for the CBDC ecosystem.

Under the current framework, the Russian central bank, the Bank of Russia (BoR), will become the main operator of the digital ruble infrastructure. It will also be responsible for all stored assets.

The main goal of the CBDC, according to the BoR, is to serve as a means of payment and transfer. Therefore, its users will not be able to open savings accounts. As the BoR emphasizes, payments and transfers would be free for individual customers and would cost 0.3 percent of the payment amount for corporate clients.

The bill was introduced in the State Duma in December 2022, and the first reading took place in March 2023. A branch of the leading Russian state gas company Gazprombank warned in February of potential risks for banks in the event of a rapid transition to digital money. The Russian branch of McKinsey estimated the potential losses for traditional banks from the implementation of the CBDC at around 250 billion rubles ($3.5 billion) over five years. At the same time, the consulting firm estimated the profit for retailers at $1.1 billion annually.

In a recent interview, the Deputy Governor of the central bank, Olga Skorobogatova, announced the mass introduction of the digital ruble for all Russian citizens by 2027. The CBDC will be tested in a pilot program between 2023 and 2024.