Head of the Russian Central Bank: By 2031, the digital ruble will become a part of everyday life.

According to local media reports, Elvira Nabiullina, the head of the Central Bank of Russia, stated during a speech at the Federal Assembly: "In five to seven years, digital ruble will become commonplace in the lives of Russians." This development aligns with Putin's previous call for the implementation of a digital ruble by the Bank of Russia and the Russian parliament passing legislation on cryptocurrency payments. It is evident that the Russian government views the progress of Central Bank Digital Currency (CBDC) as imperative.

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Elvira Nabiullina said, "By 2031, the digital ruble will become a part of daily life."

The digital ruble is currently in the testing phase, aiming to operate in sync with cash, providing a new method of payment and remittance without generating interest on balances. She also emphasized that regulatory authorities do not intend to enforce the digital ruble; the use of the digital ruble by citizens will be entirely voluntary. In August of last year, President Putin approved the digital ruble bill. The country's central bank plans to collaborate with 15 major banks in the country for pilot projects involving the currency.

Why Does Russia Need CBDC?

"We believe that there are clear advantages for people using the digital ruble. These are absolutely free transfers for citizens and much lower commissions than with corporate cards. We believe that due to these advantages, the digital ruble will gradually become a reality in five years; in seven years, it will become a familiar part of our lives," Elvira Nabiullina stated. Previously, President Putin also mentioned, "For us in Russia, it is important not to miss the moment, to timely establish a legal framework and regulations, develop infrastructure, and create conditions for the circulation of digital assets domestically and in cooperation with foreign partners."

Former Russian Minister of Foreign Economic Affairs Sergey Glazyev made the country's need for CBDC even clearer, saying, "This is urgent for us; we can no longer use Western currencies for transactions. But our partners need time to fully appreciate the benefits and importance of transitioning to our national currency." The author believes that beyond the low transfer costs of cryptocurrencies, Russia's demand for CBDC and even cryptocurrencies primarily stems from the need to de-dollarize due to economic sanctions imposed by Western countries.

Russia Legalizes Mining, Seeks to Break Free from International Sanctions

In addition to advancing the development of the digital ruble, Russia has taken significant steps to integrate cryptocurrencies into its economy. The Russian parliament recently passed a bill legalizing Bitcoin mining and allowing the use of cryptocurrencies in international trade. The legislation aims to address challenges faced by Russian banks due to regulatory restrictions and international sanctions, which have disrupted trade relations with major partners such as China, India, the UAE, and Turkey. The new law establishes a regulatory framework to oversee cryptocurrency mining activities, ensuring compliance with tax regulations and preventing illicit operations. It requires mining activities to be regulated by the government and Russian banks, with federal authorities ensuring compliance.