Introduction of the Digital Ruble

The digital ruble is a digital currency issued by the Central Bank of Russia (or the Central Securities Exchange). It is an electronic equivalent of cash and money held in bank accounts, represented by a unique digital code stored in an electronic wallet hosted on a dedicated platform operated by the Central Bank. This allows for tracking of its movement.

Since 2020, the Central Bank has been actively discussing the need for a digital ruble. In late 2021, it developed a prototype for the digital ruble platform and began testing it with selected banks in early 2022. In May 2023, the regulatory body announced the readiness of a major version of the platform. While a specific launch date for the digital ruble has not been announced, preparations are underway.

Key Features of the Digital Ruble:

1. It represents a third form of Russian currency, alongside cash and non-cash forms.

2. It will be possible to purchase goods or currency at the same rate as well as save money.

3. The Central Bank will issue the digital ruble in the form of cash rubles, while banks will process digital payments and transfers as non-cash transactions.

4. Decentralized registries will be used for the digital ruble, with each unit of currency represented by a token, a digital certificate of ownership.

5. The key differences between the digital ruble and other payment methods:

– Compared to cash and non-cash money:

• Virtual form

• No interest accrual

– Compared to cryptocurrencies:

• The issue of the digital ruble is managed solely by the Central Bank, unlike cryptocurrencies that are created through mining.

• The digital ruble has backing from gold, foreign exchange reserves, and other state assets, unlike cryptocurrencies which are only backed by public interest.

The digital ruble, as an innovative solution, is essential to maintaining financial stability and preventing the risk of money flowing into private digital currencies. This will allow the central bank to control the issuance and circulation of new digital funds, reducing risks for the state and enhancing the ability to manage inflation and maintain the stability of the national currency.

The digital ruble benefits individuals by speeding up and simplifying payments, reducing dependence on banks, and making financial services more accessible to a wider range of people. It also enables the transfer of funds between cash and non-cash forms, enhancing convenience and flexibility.

Businesses can benefit from the introduction of the digital ruble by reducing transaction costs and optimizing business processes. This leads to simplified interactions with counterparts, reduced time and costs associated with transactions, and improved overall efficiency.