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Putin Launches Digital Ruble: Russia’s Leap into the Crypto-Future Amidst Sanctions

13 Banks, 30 Businesses, and Countless Opportunities - Russia Embraces the Digital Ruble, Charting a New Financial Frontier

Vladimir Putin is bringing the “digital ruble” to Russians from today, August 1, for the payment of goods and services, following the law he signed a few days ago, on June 24, establishing the legal rules for the introduction of the digital ruble.

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The digital ruble will be put into circulation initially by 13 banks. In the pilot phase, participants will try opening and closing digital wallets and transferring them between individuals, as well as paying for goods and services in digital rubles using a QR code.

Up to 30 businesses in trade and services in 11 cities, previously selected by banks and the Central Bank, will test the payment.

Starting in 2023, the Central Bank plans to gradually expand the use of the digital ruble. It should be noted that amid Western sanctions on Russia over the war in Ukraine, the euro equals 101 rubles and the dollar equals 91 rubles.

These operations will be carried out in accordance with the rules approved by the board of the financial services regulator.

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It will also establish tariffs for conducting transactions with the third form of the national currency and the conditions under which banks should provide customers with the possibility to carry out such transactions.

In an exclusive interview previously given to CNBC, the head of Russia’s central bank, Elvira Nabiulina, stated that digital currencies are the future for financial systems. “We will go step by step because it is a complicated process, both from a technological and legal point of view.”

What is foreseen

The digital ruble will set tariffs for conducting transactions with the third form of the national currency and the conditions under which banks will have to provide customers with the possibility to carry out them.

It is envisaged that for individuals transfers and payments will be free of charge and for businesses the tariff for accepting payments will be 0.3 percent of the payment.

As noted in the document, “it will not be possible to open a deposit in digital rubles and receive a loan, and no interest will be charged on balances in digital wallets.”

In addition, the law defines the obligations of the Central Bank as a platform operator: it is responsible for opening digital wallets, conducting transactions and certain other functions. In order to organize the operation of the platform, the Bank of Russia will have the right to process personal data of users.

In addition, a ban is introduced on the use in advertising of the phrase “digital ruble platform” and words and phrases derived from it by persons who are not operators of this platform.

The document also clarifies the meaning of “foreign currency” – it will include the national currency unit of a foreign state (group of foreign states), issued in digital form.

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