Earlier this week, Russian President Vladimir Putin signed a law on the introduction of the digital ruble along with a corresponding electronic platform to manage its access and distribution. Since then, various officials have come forward to dispel concerns about the central bank digital currency (CBDC) and highlight the benefits for individuals and businesses.
CBDC surveillance worries
As the country prepares to launch a live pilot after months of delays, people are starting to react to the potential future impacts of a new retail CBDC.
One of the first public figures to speak after the signing of the law was the head of the Bank of Russia, Elvira Nabiullina, who said on Monday that the digital ruble would not be forced onto citizens. “This is an absolutely voluntary use, it is an additional opportunity for people,” she said, highlighting the convenience of a new, third form of money.
However, although its use might be voluntary, several questions remain over the digital ruble’s privacy assurances. The bill signed on Monday explicitly avoids any mentions of the word privacy, unlike the digital euro draft law, which included it on 21 different pages.
In the past, we’ve argued that the digital ruble could give Russia’s central bank significant powers, including the ability to monitor people’s activities.
“Digital currency calculations have the greatest degree of transparency, that is, it will become easier to track transactions,” said Sergei Katryin, President of the Russian Chamber of Commerce and Industry.
Perceived digital ruble advantages
However, Mr. Katryin says this could help bring opaque business activity into the formal economy. The delicate balance between privacy and financial crime is also hovering over Western central bankers’ heads, but Russia seems to have chosen to err on the latter’s side.
Ivan Gostev, commercial director of GIS MINING, also says digital rubles will generally allow for faster, more convenient transactions and foster greater innovation in the payment industry. Others point to the potential “million-dollar savings” for businesses, as they will only pay a 0.3% commission for digital ruble merchant services, compared to the 2.5% they pay today.
Lastly, Viktor Dostov, Chairman of the Association of Electronic Money Market Participants, underlines the advantage of savings in digital rubles because, unlike bank deposits, they are 100% protected by the State. He also believes future CBDC vouchers could be introduced to pay for maternity leave, child benefits, and other types of social assistance.
