Digital Rouble Project Moves Forward in Russia's Parliament

Russia's plan to develop a central bank digital currency (CBDC), dubbed the "digital rouble," inches closer to completion as the nation's lower parliamentary chamber, Gosduma, gave its approval.

The bill will now journey through the legislative labyrinth, requiring the upper chamber's sanction before it can be sealed with the President's signature.

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Initiated in December 2022, the draft bill last saw modifications in June and lays down the legal framework for the CBDC ecosystem, defining key elements such as "platform," "participants," and "users."

The current legislative landscape positions the Central Bank of Russia (CBR) at the helm of the digital rouble infrastructure, holding it accountable for all stored assets.

According to CBR, the primary role of the digital rouble will be facilitating payments and transfers, effectively preventing users from creating savings accounts with digital currency. 

The central bank has pledged free transactions for individual customers, while corporate entities will bear a nominal fee of 0.3% per transaction.

Despite this progression, the digital rouble's journey has not been without skepticism. In February, a subsidiary of Gazprombank, a government-owned gas company, expressed concerns over the rapid transition to digital currencies and the potential risk for conventional banks.

McKinsey's Russian division further underscored this apprehension by estimating a potential loss of around $3.5 billion for traditional banks over five years following the CBDC's implementation. In contrast, retailers could see an annual profit boost of $1.1 billion.

In a recent public dialogue, Olga Skorobogatova, CBR's deputy chairman, forecasted a nationwide rollout of the digital rouble for "all Russian citizens" between 2025 and 2027. Meanwhile, the currency will undergo trial tests in a pilot regime from 2023 through 2024.

It is worth noting that at the end of May, Russia shelved the idea of establishing a unified national cryptocurrency exchange.