Russian President Vladimir Putin has signed a law officially introducing the digital ruble, according to a document published on the official government portal. The digital currency is set to be operational starting from August 1. The introduction of the digital ruble aims to provide an alternative form of payment alongside the traditional ruble, both in cash and non-cash transactions.
The digital ruble will be used for transfers and payments, with users storing their currency in digital wallets on a specialized platform operated by the central bank. However, it should be noted that the digital ruble cannot be used for opening deposits, taking out loans, or earning interest. These conventional banking activities will still be limited to the traditional ruble.
In addition to signing the law, President Putin has also made amendments to the Civil Code to ensure that the digital ruble can be bequeathed and inherited. This move establishes the legal framework for the digital ruble and ensures its smooth integration into various aspects of the economy.
The idea of introducing a national digital currency was initially proposed by the Bank of Russia in late 2020. Unlike cryptocurrencies such as Bitcoin, the digital ruble is expected to have lower risk as it will be issued by the state monetary regulator and backed by traditional money. This provides users with a level of stability and trust in the currency.
The introduction of the digital ruble is part of Russia’s broader efforts to develop its digital economy and enhance financial innovation. By digitizing the national currency, Russia aims to improve payment efficiency, reduce transaction costs, and modernize its financial system. It also aligns with the global trend of central banks exploring digital currencies.
While the digital ruble offers convenience and potential benefits, it also raises concerns about privacy and financial surveillance. As all transactions will be conducted on a centralized platform operated by the central bank, there are concerns about data security and the potential for government control over individuals’ financial activities. These concerns will need to be addressed to ensure the widespread acceptance and adoption of the digital ruble.
Overall, the introduction of the digital ruble represents a significant step towards the digitization of the Russian economy. It provides an alternative form of payment that is backed by the state monetary regulator, offering stability and trust to users. As the digital ruble becomes operational, it will be interesting to observe its impact on the financial landscape and how it shapes the future of payments in Russia.
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