The State Duma adopted a law on the introduction of the digital ruble. In particular, it consolidates the concepts of “digital ruble platform”, “digital account (wallet)”, as well as other similar formalities. The Central Bank becomes the operator of the digital ruble platform. So far, it will not be possible to open a deposit or receive a loan in digital rubles – it will mainly be used to make transfers, including cross-border ones.
Lawyer Yury Brisov, LL.M, MJ, partner at Digital & Analogue Partners explained to The Insider how the digital ruble will work and why it is beneficial for Russia to implement it:
Bitcoin, as well as other cryptocurrencies that were released subsequently, have seriously competed with national currencies. The states could not stand aside. At first they tried to ban them. It soon became clear that this is the same as fighting the Internet. And if you can’t win, take the lead – that’s what the leading powers, including Russia, thought, and began to develop laws on digital assets.
The digital ruble is a kind of attempt to create a cryptocurrency that will be controlled by the state, and the issue of which will be carried out by the Bank of Russia. Therefore, over time, it will be able to become a full-fledged replacement for the ruble.
Advantages of introducing a digital ruble:
Savings on commissions. Since commercial banks are being replaced by the Bank of Russia, payment transactions will be accompanied by a reduction in transaction costs due to the absence of additional intermediaries and the need to pay them a commission for servicing an account. Commissions for accepting payments in digital rubles for retail outlets are planned to be set no higher than in the Fast Payment System. This is about 2.5-3 times more profitable compared to the tariffs of commercial banks.
Increasing competition in the financial market. Credit institutions will compete with the digital ruble platform, so it is possible that we will see a decrease in fees for money transfers.
Facilitate cross-border settlements. If we are talking about international cooperation, the introduction of the digital ruble will be useful to facilitate cross-border and tax payments (especially during the period of sanctions).
The convenience of the system. The possibility of carrying out transactions with the digital ruble will be integrated into the interface of mobile applications of commercial banks for the convenience of customers and maintaining the popularity of mobile banking services. This structure significantly distinguishes the digital ruble from the usual non-cash payments, since the client gets access to the wallet through any bank in which it is serviced.
Among other advantages, they also note an increase in the variety of payment methods, the ability to use a digital wallet without access to the Internet, and a high level of safety and security of storing funds. Unlike digital currency, the digital ruble regime has great development prospects. It may eventually replace not only non-cash, but also cash in Russia.