Russian Parliament Approves Draft Law for Digital Ruble Implementation

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Russian Parliament Approves Draft Law for Digital Ruble Implementation

The lower house of Russian parliament, the State Duma, has passed a bill on the creation of a digital version of the national currency, the ruble. The proposed law, which passed its first reading, would amend existing legislation and introduce new definitions to establish procedures related to the launch of the central bank digital currency (CBDC).

The draft law aims to amend the law “On the National Payment System” by adding legal definitions relating to the CBDC, including “participant of the digital ruble platform” and “user of the digital ruble platform.” The Central Bank of Russia (CBR) will act as the sole operator of the digital ruble platform, which will ensure its safe functioning.

The proposed legislation would also amend the law “On Currency Regulation and Currency Control” to secure the status of the digital ruble as a currency of the Russian Federation and define digital currencies issued by other central banks as foreign currencies.

Critics of the bill have expressed concern over the proposed powers of the CBR to process personal data without obtaining user consent and without notifying the body responsible for the protection of such information. The State Duma has tasked the Financial Market Committee to consider the need to ensure the protection of personal data when finalizing the document ahead of the second reading.

The Bank of Russia plans to start testing the digital ruble with real users and transactions on April 1, 2023, with the aim of a full launch in 2024. If approved, the digital ruble would be Russia’s first state-backed digital currency, joining a growing number of countries exploring the potential benefits of CBDCs.

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