Russia passes a bill giving legal authority to its CBDC

This means that Russia could potentially start testing the digital rouble at the beginning of August 2023, provided that President Vladimir Putin also signs off on the bill. The bill in question passed through the Federation Council, which is Russia’s higher legislative body after it worked its way through the State Duma. 

If the legislation comes into effect, the country’s central bank will become the platform operator for the digital ruble. Russians will be able to use the CBDC to conduct payments and transfers from digital wallets connected to the central bank's platform or one of the partner banks that it will be working with. It’s worth noting that the CBDC will only be used for payments or transfers and not lending or deposits. 

Representatives from the Central Bank of Russia cited by decrypt.co touched on the subject of user privacy, and although the digital ruble will take into account the privacy of Russians, it will not offer the same levels of anonymity as cash transactions.

Russia’s CBDC implementation efforts 

Russia announced its digital ruble project in October 2020 and completed a prototype of the CDBC platform in December 2021. In September 2022, the Central Bank of the Russian Federation tested the platform for the digital ruble and even completed a cycle of transfers between individual clients. Digital wallets were also introduced to the digital ruble platform, and clients were able to exchange non-cash rubles in their accounts for digital ones.  

Countries such as China and India have already launched pilots for their CBDCs, while the US is taking on a more conservative approach and is still researching and pondering the implications of launching a digital dollar.

CBDC advantages and drawbacks

Unlike other cryptocurrencies such as Bitcoin and Ethereum, CBDCs are centralised tokens tied to national fiat currencies. According to Forbes, CBDCs can offer a secure and reliable means of digital payment and remittance. They can be used for both online and offline transactions, they can be integrated into existing payment systems, and they can also facilitate cross-border payments. 

As for disadvantages, the main concern is that CBDCs could lead to increased levels of surveillance of financial transactions, which raises certain privacy and security concerns. Forbes also looked into the negative effects that CBDCs could have on the banking sector, as banks could end up in competition with CBDCs and lose some of their profits.