On December 29, 2022 two draft laws were submitted to the State Duma that envisage the issue of a “digital rouble”. Thus, three forms of rouble are possible in Russia in the near future: cash, non-cash, and digital. 1 digital rouble = 1 rouble in cash or non-cash form.
The operator of the digital rouble settlement platform will be the Bank of Russia.
One of the draft laws proposes to supplement the Civil Code with the concept of a digital wallet, as well as norms regulating the content of a new type of contract – a digital account or wallet contract, as well as the rules of digital currency settlements.
The client will be able to use the digital wallet through any bank where he/she is served.
Advantages and possibilities of digital rouble
The digital rouble will have the same functionality as usual forms of payment: payment for goods and services, and online transfers. The digital rouble will be stored in a digital wallet on the Central Bank’s platform. It will not be possible to cash digital rubles.
An interesting feature of the digital rouble will be the possibility to limit the purposes for which the recipient can use the money. For example, such an option will allow parents to control their children’s expenses, transfer funds to representatives/employees for specific representative/work purposes. Such payments can only be made between those with open digital wallets.
In addition to the aforementioned conveniences, the digital rouble will provide for citizens and businesses:
– Safety of funds and security of monetary transactions and settlements;
– The ability to make payments and settlements both online and offline;
– Reduction of transaction costs due to the establishment of unified tariffs.
On the other hand, for the government, the introduction of the digital rouble also has its advantages:
– Will ensure transparency of all payments and facilitate control over the implementation of budgetary funds;
– Reduce the cost of budget payments through the use of smart contracts, which will automate and simplify all administration processes;
– May facilitate international payments in the future when interfacing with similar digital currency platforms in other countries.
With the advent of the Digital Rouble, new forms of financial activity will emerge, the transactional business model will be transformed and a number of existing financial products and services will change (e.g. products that can be automated through smart contracts) or will not be needed in the future.
When will the digital rouble appear?
If the bill is approved, it will come into force on 1 April 2023, with the exception of certain regulations that will come into force in 2024. It is planned to test how the new currency will function in practice as early as spring 2023.