Several well-known countries around the world are making considerable development in terms of their research and endeavors related to central bank digital currencies (CBDCs). In this respect, Russia is witnessing a huge momentum dealing with its CBDC project digital ruble. Recent reports have pointed out that the parliament of the country has reached closer to milestone legislation concerning the project.
Russia’s State Duma Authorizes a Crucial Legislation for Digital Ruble
On the 11th of this month, the lower parliamentary house of the Russian parliament (also called State Duma) approved the legislation in the 3rd reading. If the respective bill gets final approval, it will move to the country’s President who would decide if the respective legislation should become a law or not. Initially, the bill was proposed to the parliament back in December last year. Following that, in March this year, it got approved in its 1st reading.
In line with the proposed legislation, the central bank of the country will play the role of the organization responsible for operating the CBDC infrastructure. In this respect, the Bank of Russia will have the responsibility of the security and issuance of the central bank digital currency (CBDC). In addition to this, the legislation also describes crucial concepts such as investors, platforms, as well as the rest of the participants.
The purpose of these definitions is to offer a resilient regulation with clear guidelines regarding the sector. The authorities in Russia disclosed the strategy to take benefit from blockchain technology for the CBDC project. This idea is focused on offering exclusive payment alternatives as well as cross-border solutions.
With this, the government intends to compete with rival crypto assets such as Bitcoin. According to the Russian authorities, Bitcoin is risky for residents and disadvantageous for the economy. The chief focus of the policy includes transactions and payments. With this, the consumers will not require saving accounts. Along with this, no charges are implemented on the individual customers.
Corporate Users Will Require Paying 0.3% While Using Digital Ruble
On the other hand, corporate users will have recompense charges of just 0.3% while using the digital ruble. In the meantime, the reports have brought to the front that the country will expectedly start the pilot project of its CBDC in August because it is endeavoring to bring closer the launch date. Digital currencies and blockchains have had an uncertain relationship within the Russian jurisdiction.
Initially, Russian President Vladimir Putin condemned digital assets because of several reasons paving the way for a broad-level prohibition. During the prohibition, he praised the technology at the back of the crypto assets and called for a wide adoption to assist the cross-border payments as well as the decoupling of the worldwide financial monopolies.
The recent drastic moves taken by Russia have turned out to be quite dangerous for its position within the region. As Russia invaded its neighboring country Ukraine, it witnessed economic sanctions. Because of that, it became hard for the country’s residents to trade worldwide. This led to the deployment of crypto assets by Russian companies.
The respective entities also moved toward the rest of the alternatives to minimize the impact of the Western sanctions. After the country’s prohibition from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), massive inflows were recorded by the firms dealing with the exchange of digital assets within the region.
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