The Ministry of Finance announced that in 2024 Russians will be able to use digital rubles.
Russian citizens will be able to open a digital wallet and use digital rubles as early as next year. This was revealed by the Minister of Finance, Anton Siluanov, at the ‘Russia’ exhibition in Moscow. He explained that digital rubles could be exchanged for both cash and non-cash rubles.
The head of the ministry also reminded that in the upcoming year, the Ministry of Finance and the Central Bank will test the use of digital rubles for budgetary expenses.
“‘The digital ruble is essentially a piece of software code,’ explained Mikhail Khachatryan, Ph.D., Associate Professor at the Department of Strategic and Innovative Development of the Financial University under the Government of the Russian Federation, speaking to GORUS. ‘And in this regard, there’s a parallel drawn with cryptocurrencies, but I want to disappoint all fans and advocates of these assets—similarities end with the aforementioned statement. Unlike cryptocurrencies, the digital ruble is not mined or produced by solving any computer tasks; it is issued by the Central Bank of Russia and backed by the assets of the Central Bank located in the Russian Federation, namely, gold and foreign exchange reserves.’
As per decisions made by the Central Bank in coordination with the Government and the President of Russia, the digital ruble will become the third form of the national currency, alongside cash and non-cash. Similar to cash currency, each unit of the digital ruble will change its unique code, which the issuer—the Central Bank of Russia—can track.
‘The penetration of digitization trends in the monetary and currency sphere has been discussed for a long time, both in Russia and globally. However, the digital ruble is relatively young; the decision to introduce it was made in the middle to end of 2022, and testing began on April 1, 2023,’ explained Mikhail Khachatryan.
The expert noted several advantages of the digital ruble compared to cash and non-cash rubles.
- The digital ruble is easier to trace, which is advantageous for the state in terms of combating money laundering, terrorism financing, and countering other criminal activities in the financial sphere.
- Regarding the advantages for ordinary citizens, as was the case with the emergence of the national payment system MIR, it will result in the appearance of an alternative means of payment, as well as various stimulating benefits such as cashback for transactions, discounts, bonuses, and reduced fees for online purchases. Another advantage is increased profitability from banks when purchasing digital assets.
‘Most likely, the digital ruble can become an interesting asset for investment, almost akin to stocks and bonds in the stock market. Of course, we shouldn’t expect the same frenzy as seen in the domestic stock market during the pandemic, but digital assets of leading Russian banks, in the form of which the digital ruble will be represented, may find their followers. In this case, just like when playing on the stock exchange, it’s important to be attentive and cautious, evaluate one’s financial capabilities and potential risks, such as fluctuations in the return on digital assets or sudden changes in their price,’ summarized Mikhail Khachatryan.
Earlier, the expert shared with GORUS whether there will ever be a single currency for the whole world.