Russia Approves the Issuance and Regulation of Central Bank Digital Currency

03/19/2023 03:45 • Digital Disruptors • 91 views

According to reports from local media, the Russian State Duma approved the first reading of the draft law establishing the issuance and regulatory system of the Central Bank of Russia’s digital currency (CBDC) this week. In addition, Russia also approved the first reading of the bill amending the Russian Civil Code and defining the digital ruble as a “non cash currency”, as well as formulating rules on wallet agreements and inheritance of digital currencies, These two bills mainly fill the regulatory gap brought about by currency digitization. Currently, both bills will be reviewed and a second reading will be finalized based on feedback from lawmakers. The second reading will take place in the coming months.

The draft law on the establishment of CBDC regulation and issuance in Russia has been approved by legislators on first reading

Analysis based on this information:

The Russian State Duma has taken a significant step in the direction of digitization of the country’s currency by approving the first reading of two bills related to the issuance and regulation of its central bank digital currency (CBDC). The first bill outlines the regulatory framework regarding the issuance of digital currencies by the Central Bank of Russia, while the second bill amends the Russian Civil Code with clauses related to digital currencies, including the definition of the digital ruble. The bill also specifies the rules for wallet agreements and inheritance of digital currency.

The passing of these two bills aims to fill the regulatory gap in the rapidly evolving digital currency space. While there are no substantive guidelines in existence for regulating digital currencies in Russia, the country has a long history of strict regulatory measures for its financial sector. As a result, the bills are an attempt to create a regulatory framework that balances the needs of the financial sector with the emerging technology of digital currencies.

The CBDC is a digital form of traditional currency whose value is pegged to a nation’s central bank reserves. It is backed by the country’s monetary policy and, unlike cryptocurrencies such as Bitcoin, whose value is highly volatile, is intended to have a stable value. The introduction of the digital ruble is expected to improve the speed and efficiency of financial transactions, reduce transaction costs, and provide greater financial inclusion for citizens.

The second reading of these bills will continue to be reviewed by lawmakers, with the possibility of further changes to the legislation. However, the initial passing of the bills is a significant development for the digitization of financial systems of the country, and it is expected to provide an impetus for other countries to follow suit.

In conclusion, the regulation of digital currencies is a major policy challenge for governments globally. Russia’s move to create a regulatory framework for CBDC is a positive development for the digitization of the country’s financial systems. The successful implementation of the digital ruble will boost technological innovation, enable the country to keep pace with global transactions, and enhance financial inclusion for its citizens.

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