Russia plans to launch its digital ruble prototype issued by the Central Bank by January 2022
RIO DE JANEIRO, BRAZIL – Russian Federation authorities plan to begin testing a prototype digital ruble issued by the Central Bank in January 2022. The Izvestia newspaper reported Saturday, citing the Ministry of Economic Development, the Central Bank, and the Russian State Duma.
The prototype digital ruble platform is expected to be ready in December 2021. The attempt to launch the digital currency will be carried out in several stages, expanding the list of operations and increasing the number of participants in the project, which currently involves up to 12 financial institutions.
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The relevant legislative amendments are to be implemented from January 2022 in parallel with the experiment, said Anatoly Aksakov, head of the State Duma’s Financial Markets Committee.
At least eight federal laws and five codes are amended: civil, tax, budgetary, criminal, and administrative.
According to Aksakov, holders of fiat money and digital rubles will have the same rights. He said the new currency would serve as a means of payment, appreciation, and savings, just like regular money, adding that a “seamless” payment space and “easy convertibility of the ruble from one form to another” will be ensured.
Alexei Minayev, deputy director of the Department for the Development of the Digital Economy of the Russian Ministry of Economic Development, said a trend to introduce digital forms of national currencies in the world, stressing that this initiative has practically nothing to do with cryptocurrencies.
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According to VTB Bank, the project envisages integrating services to open a person’s wallet via a mobile application and transfer the new form of national currency between individuals.
Representatives of another Russian bank, PSB, said that the introduction of the digital ruble would reduce transaction costs and provide customers with the ability to store money securely on the central bank’s platform and a unified approach to estimating the cost of transfers.
Other benefits of the project include more convenient operation and the development of smart contracts, which will contribute to greater transparency.
MOST EFFECTIVE SOCIAL CONTROL MECHANISM
These digital national currencies, also called “Fedcoins,” according to The Economist, “are a new incarnation of money. They promise to make finance work better but also to shift power from individuals to the state, alter geopolitics and change how capital is allocated.”
The same piece also reveals the increased level of support for digital money: “Over 50 monetary authorities, representing the bulk of global GDP, are exploring digital currencies.”
The ultimate goal of Fedcoins around the globe is that each person will have only one account, through which all transactions will take place, and this account will no longer be with a commercial bank but with the central bank.
The background to this plan is logical. Digital central bank money is programmable. It would allow the state to monitor all transactions, assign different tax rates, and impose individual penalties.
The state could partially tie the money to an expiration date and could force its citizens to spend certain specific sums within certain time periods. It could also earmark the money and force us to spend certain amounts only on certain goods or in certain regions.
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