Russian CBDC legislation expands foreign access

The Central Bank of Russia’s (CBRs) digital ruble pilot was delayed from its planned start date of April 1, pending the passage of legislation at the State Duma. The delayed version was expected to pass by now, but according to the Russian state news agency TASS, the legal go ahead for the central bank digital currency (CBDC) has been pushed back to around the end of July. The pilot includes the clients of 13 banks.

Non residents have unrestricted digital ruble access

The latest iteration of the legislation has several changes, particularly relating to non residents. Non residents have the right to carry out digital ruble transactions without restrictions. This contrasts with many other central banks that aim to limit foreign usage in the early stages. However, for Russia, a key driver is to enable an alternative payment system in the face of sanctions over its invasion of Ukraine.

The central bank is the operator of the platform and can authorize both domestic and foreign banks to participate. Non residents can access the digital ruble via a foreign bank, a domestic bank, and via the central bank directly where the law allows it.

In January, there were reports that the central bank was starting to experiment with cross border CBDC including through bilateral linkages as well as a shared platform. While there has been some talk about potential linkages with Iran, India and China, nothing has been formally announced. Instead, India announced cross border work with the UAE, which is also not unfriendly with Russia. And the UAE and China are both involved in the MBridge shared CBDC platform.

Besides using CBDC, Russia has also drafted a law to enable it to use digital assets such as tokenized precious metals for cross border payments.