Legitimate! Digital Ruble Becomes Russia's Official CBDC

Ruble digital was approved as a Russian CBDC. (Photo; Doc. Paymentscards and Mobile)

JAKARTA - The Russian president, Vladimir Putin, has approved a draft regulation for the application of Russia's central bank digital currency (CBDC), which will be ruble's third digital form, after cash and non-cash money (bank).

Through this historic signature, Putin opened the door for the use of CBDC, known as the "digital ruble," as a means of payment and other means of transfer across the Russian Federation.

As a step forward in financial innovation, this digital currency will be a new alternative for the people of Russia. Digital rubles will be available free of charge to citizens, but companies will be charged a commission of 0.3% of the amount transferred when using this service.

In the framework of a law passed by the State Duma and the Russian Federation Council in early July, the Russian Central Bank (CBR) will be the only issuer and payment system operator for the digital ruble. Transactions using digital currencies will be processed through a special platform called the "digital ruble."

Digital wallets will be used to store CBDCs, and access will be available through mobile applications of commercial banks participating in this system. However, it is important to note that this law does not allow the opening of bank accounts in the form of digital rubles or loan receipts with central bank digital currencies.

The ratification of this law is considered an attempt by the Russian government to provide a more advanced domestic payment alternative, as well as to address financial restrictions imposed on the war in Ukraine.

Elvira Governor Nabiullina of the Central Bank of Russia (CBR) stated that they are also considering options to integrate the digital ruble platform with other CBDC systems, with the aim of facilitating the use of digital rubles in cross-border transactions.

Nonetheless, Russian officials have stressed that payments using cryptocurrencies will only be permitted in foreign trade and under a special legal regime. Putin has also signed a new law that effectively prohibits the use of certain cryptocurrencies in the purchase of goods and services in Russia.