Putin signs digital ruble law, Russia officially launches CBDC pilot

Russian President Vladimir Putin signed the digital ruble bill on July 24, which will officially come into effect as law on August 1, authorizing the Russian Central Bank to launch a CBDC pilot to consumers.

Digital Ruble Law Officially Takes Effect in August

According to previous reports, the Central Bank of Russia introduced a CBDC roadmap in October 2020. Originally scheduled for launch in 2024, it was accelerated to April of this year due to sanctions resulting from the Ukraine-Russia conflict. Thirteen local banks and numerous businesses conducted pilot transactions of the digital ruble.

As reported by Cointelegraph, Russian President Vladimir Putin signed the Digital Ruble Law on July 24, which will officially come into effect on August 1, authorizing the Central Bank of Russia to launch the first CBDC pilot for consumers in August. The Central Bank of Russia will operate the digital ruble infrastructure and be responsible for all stored assets. The digital ruble is intended for use in payments and remittances, not for investment purposes.

Elvira Nabiullina, the Governor of the Central Bank of Russia, stated that Russian citizens will not be compelled to use CBDC, and the use of the digital ruble will be voluntary and up to individual choice.

No one will force anyone to use the digital ruble. We hope it will be more convenient and cheaper for individuals and businesses. This will be a new opportunity.

The Deputy Governor of the Central Bank of Russia, Olga Skorobogatova, mentioned that the government does not anticipate widespread adoption of the digital ruble in Russia until 2025 or even 2027.

Russia's Multi-Pronged Approach to Bypass Sanctions

Since the Ukraine-Russia conflict, Russia has faced sanctions from Western countries and has been attempting to bypass the SWIFT international payment system for cross-border transactions. According to Izvestia reports in May, Anatoly Aksakov, the Chairman of the State Duma Financial Market Committee, stated that government authorities have abandoned the idea of creating a national cryptocurrency exchange and are now focusing on establishing and operating rules for such infrastructure. He explained:

The exchange will be used for cross-border settlements, including circumventing sanction restrictions.

It has been previously reported that Russia is exploring other systems to bypass USD settlements, such as collaborating with the Central Bank of Iran to create a "gold-backed stablecoin" and developing the SPFS financial messaging system in 2014. With the official signing of the Digital Ruble Law by Putin, will this also help Russia facilitate smoother cross-border transactions? It appears that Russia is employing a multi-pronged strategy and disregarding Western sanction limitations.