Vladimir Putin, the president of Russia, today signed a bill authorizing the country’s central bank to mint its own digital money into law.
The latest revisions to Russia’s Civil Code provide that the digital ruble, which the Bank of Russia has been considering for some time, would be utilized for payments in addition to existing channels. The central bank will be in charge of managing the digital ruble accounts, according to the law. On July 11, the third and last hearing of the law was completed, and it had been awaiting the president’s signature.
The Bank of Russia has been working on the digital ruble CBDC project since 2020, when it released its initial research paper on the subject. Later, the regulator amended the report to include comments from Russian banks and other players in the financial industry. The system’s piloting began in February 2022 with a number of Russian banks, according to the regulator, just before that nation’s invasion of Ukraine.
The digital ruble may now be a means of avoiding the severe financial constraints the West has placed on Russia as a result of its heavy sanctioning by the U.S. and Europe. The Bank of Russia initially saw the project as a means of avoiding sanctions and a mechanism to monitor how the government is using funds designated for social programs.
Anatoly Aksakov, the chairman of the parliamentary committee on financial markets, claims that the digital ruble would also enable regulating and restricting the methods in which individual citizens can use them. For instance, parents will have authority over how their children use their pocket money, Aksakov said in an interview with Parliamentskaya Gazeta earlier in July.