Русский
Mass Digital Ruble Usage Expected By July 2025
In an effort to intensify, speed up, and broaden the available tools used for settling international transactions, the Russian State Duma has passed, in its first reading, a bill that opens the way for the Bank of Russia to launch an experimental platform for the use of cryptocurrencies in international settlements. The document was introduced by a broad base of deputies from different factions gathered and led by Anatoly Aksakov, chairman of the lower house’s Financial Market Committee.
If the bill is approved by the Troika, consisting of the State Duma, the Federation Council, and the President of the Russian Federation, the law will come into full effect on September 1, 2024. These approvals are expected and should serve to ease potential operational hiccups due to fears by counterparties of secondary, even tertiary, sanctions by the West when using traditional, even national currencies for trade settlements should they be part of or related to the SWIFT system.
Amendments have been proposed to laws impinging on the Bank of Russia, currency regulation, and currency control. The changes will allow for the operation on an “experimental legal basis,” combining permissions within the scope of the law on digital financial assets and digital currencies to conduct international settlement operations in cryptocurrencies.
As of now, Russia prohibits the use of digital currencies for settlements. But this is set for almost immediate change. The bill adopted in the first reading will allow, within the framework of the experimental legal regime (EPR), the use of cryptocurrencies in international trade settlements. The functions of the regulator of the EPR in the field of digital innovations in the financial market will be assigned to the Central Bank. In response, the Central Bank has described its procedure for assessing and managing risks on the experimental platform.
We expect that its implementation will contribute to increased competitiveness, increase the availability of a range of goods, as well as the growth of the profits of entrepreneurs and attract increased investment. Earlier on July 24, the State Duma also passed in the first reading a bill that will legalize cryptocurrency mining in Russia. This is a path that is at the same time courageous for any government to take and is at the cutting edge of support for free, unsanctioned trade.
There also appears to be the potential for almost immediate implementation. The Central Bank of Russia Governor, Elvira Nabiullina has said that she expects the first settlements in cryptocurrencies under the experimental legal regime (ELR) to happen before the end of the year, and with mass usage to be introduced by July next year.
Nabiullina stated, in a speech to the Federation Council, that “In terms of our pilot project for the digital ruble, we will expand it in just a month for those banks that are already with us in the pilot mode. There will also be a series of expansions for the pilot project going forward. I can currently say that if everything continues to go according to our plan, then we will successfully implement the pilot projects. We will be able to move from the pilot mode to mass implementation of the digital ruble as of July 2025. We are aiming for these dates.”
The implications of these developments should not be underestimated. What Russia is effectively doing is replacing the US dollar-led global transactional system, which includes SWIFT, with a digital settlement system that operates beyond US control and is governed solely by the Central Banks concerned. It will ultimately make financial sanctions upon Russia less effective and could lead to a revolutionary explosion in the use of sovereign currencies as opposed to the US dollar standard. That in turn is likely to lead to extensive global de-dollarisation in transactions that do not involve the United States.
Russia’s Pivot to Asia wishes to thank Paul Goncharoff for his assistance with this article.
Further Reading
Russia To Permit Foreign Bank Branches & Cryptocurrency Settlements
