Russia's Central Bank Governor: CBDC will become part of everyday payments in 2031

Elvira Nabiullina, the head of the Central Bank of Russia, reiterated that the regulator believes that Russia’s central bank digital currency (CBDC) will be widely used in the next five to seven years.

In a recent speech to the Federation Council, Nabiullina said that CBDC has significant benefits for payments, according to local media reports on July 30.

Nabiullina stressed that by 2031, the digital ruble will become a familiar part of people’s daily lives. She said that the advantages of the digital ruble, such as free transfers for individuals and lower transaction fees for businesses, will drive the adoption of the digital ruble.

The digital ruble is currently in an advanced pilot phase and is designed to operate alongside the cash ruble and non-cash ruble, providing a new method of payments and transfers without incurring interest on balances.

President Putin signed the digital ruble bill last year and officially authorized its implementation from August 15, 2023. The law designates the Bank of Russia as the operator of the digital ruble infrastructure, responsible for processing all related transactions.

The pilot phase will see 13 local banks testing basic functions, such as opening digital wallets and conducting person-to-person transfers, with plans to expand in 2025 based on the success of the pilot.

In addition to advancing the development of the digital ruble, Russia has taken important steps to integrate Crypto assets into its economy.

The Russian State Duma recently passed a bill that legalizes BTC mining and allows the use of Crypto assets in international trade.

The legislation aims to address challenges faced by Russian banks due to regulatory restrictions and international sanctions, which have undermined trade relations with major partners such as China, India, the UAE and Turkey.

At the same time, the new law establishes a regulatory framework to oversee Crypto asset mining activities, ensure compliance with tax regulations and prevent illegal operations. The bill stipulates that mining activities are regulated by the government and the Bank of Russia, and compliance is ensured by federal agencies.

The bill allows the sale of Crypto assets obtained from mining without using Russia's information infrastructure, making these transactions exempt from domestic currency regulatory laws. However, the bill still prohibits the use of Crypto assets for domestic payments.

In addition, Russia is also considering formally legalizing stablecoins for international transactions to simplify cross-border payments for Russian companies under ongoing sanctions.

The Ministry of Finance recently proposed allowing traditional exchanges to process digital asset transactions for specific investors and outlined the possibility of developing special regulations for digital currency transactions that are identified as commodities.