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Tim Alper
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Tim Alper
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The digital RUB rollout has made another breakthrough after the Russian government and Central Bank announced the “successful trial” of the CBDC in “budgetary settlements.”
Per the Russian newspaper Vedomosti, the Central Bank, the Treasury, and the Ministry of Finance tested the digital ruble in budgetary operations behind closed doors “at the end of 2024.”
Digital RUB: Rollout Nears
The ministry has made no secret of its keenness to start making certain types of welfare payments with the CBDC.
Media outlets say that the Central Bank wants to roll the coin out by early July this year, despite pushback from the nation’s commercial baking sector.
Finance Minister Anton Siluanov first began speaking about his ministry’s intentions to test the CBDC’s budgetary capability over a year ago.
The Central Bank says its testing “is ongoing.” It did not reveal any of the details of the pilot’s “budgetary” transactions.
The Ministry of Finance has said that “so far” there are “no plans to make government payments to citizens” using the digital RUB.
However, Siluanov has repeatedly talked up the use of the digital ruble to “ensure the targeted use of budget funds.”
July Launch for Russia’s CBDC?
Moscow officials have previously spoken about the coin’s potential in helping to eliminate public sector corruption.
They also think they could mark or “color-code” certain digital ruble welfare payments to ensure citizens use government handouts correctly.
This, they think, could help wipe out benefits fraud.
Meanwhile, lawmaker Anatoly Aksakov, the head of the State Duma’s Committee on the Financial Markets, has suggested that the Chuvash Republic (Chuvashia) could become a major testbed for “budgetary”-themed digital RUB projects.
Aksakov is the State Duma representative for the Cheboksary constituency in the Chuvash Republic, in the center of European Russia.
The lawmaker is also the chief architect of Russia’s crypto, blockchain, and CBDC-related legislation.
The media outlet MK.ru reported that the Chuvash Republic’s Governor is also backing the bid.
“I am confident that we will succeed, and the results we have achieved will be further extended to the entire country.”
Chuvash Republic Governor Oleg Nikolaev
Budgetary Settlements
The same media outlet noted that the republic was ready to test a “new mechanism” that was “designed to increase the transparency of the distribution of budget funds and ensure control over their targeted use.”
Russia has fast-tracked the launch of the digital RUB as part of an apparent bid to break away from dollar dependence.
Testing on the digital ruble started in August 2023. The Central Bank has since announced that all “systemically important credit institutions” (the nation’s biggest banks) will launch CBDC transactions “from July 1, 2025.”
On December 4, 2024, Russian President Vladimir Putin announced his own intentions to ensure that Moscow begins using the digital ruble “in settlements within the federal budget” in 2025.
Citizens Concerned About CBDC
The Central Bank has previously urged citizens not to fear the digital RUB, despite multiple surveys demonstrating Russians’ distinct lack of appetite to adopt a CBDC.
However, Putin, Moscow officials, and the Central Bank think they will be able to use the coin to trade with BRICS nations and other partners without the need for the US dollar.
While the Finance Ministry believes Bitcoin (BTC) and altcoin payments can help Russian trade firms bypass US, UK, and EU-led sanctions, the Central Bank has long pursued a digital RUB-based solution instead.
The bank says that the digital RUB will become Russia’s “third” form of currency, after cash rubles and “non-cash fiat.”
