Vladimir Putin praises digital ruble, calls for CBDC’s widespread use in Russia

07/26/2024 / By Kevin Hughes

Russian President Vladimir Putin recently praised the “efficiency and functionality” of the Central Bank of Russia’s central bank digital currency (CBDC) and instructed his government to get ready for the extensive launching of the digital ruble.

According to a Substack report from American writer and journalist Riley Waggaman, writing under the moniker Edward Slavsquat, Putin has called for the full-scale implementation of the digital ruble.

Waggaman wrote that after praising the “efficiency and functionality” of the Central Bank of Russia’s CBDC, Putin instructed his government to prepare for the widespread introduction of the digital ruble.

“Now we need to take the next step, namely: Move to a broader, full-scale implementation of the digital ruble in the economy, in business activities and in the financial sector,” Putin said during a recent meeting on economic issues.

Since August 2023, the Central Bank of Russia has been carrying out a pilot program for the digital ruble involving 12 banks, 600 people and 22 trade and service ventures. The program will be extended in September to include an added 20 credit institutions. (Related: Russia plans to start testing its digital ruble CBDC this summer.)

Despite the prevailing opposition to the digital ruble from across Russia’s political domain, the Central Bank of Russia and its media supporters claim that the traceable, programmable, centralized digital token will help avoid sanctions and fight corruption through better financial transparency.

“It is important for Russia to ‘seize the moment,’ as they say, to create the legal framework and regulation in a timely manner, to develop infrastructure, to create conditions for the circulation of digital assets, both within the country and in relations with foreign partners,” said Putin.

Putin wants digital ruble to evade sanctions

Back in April, Central Bank of Russia Gov. Elvira Nabiullina updated the State Duma – the Russian parliament – on the status of trials. She noted at the time that scaling operations up would begin in 2025.

“In our opinion, [wider adoption] will take five to seven years,” said Nabiullina. “This will be a natural process, because the choice of the people themselves and the business is fundamental. It should be convenient for them.”

Putin’s comments regarding speeding up the development of the digital ruble may throw Nabiullina’s timetable out the window. His comments also come at the same time media reports that Western sanctions are disrupting international transactions between China and Russia.

Back in June, the Shanghai branch of Russian major state-owned bank VTB, which serves as a significant channel for money transfers between Russia and China, was added to the United States Department of the Treasury‘s Office of Foreign Asset Control’s (OFAC) sanctions list.

At the time, OFAC’s new sanctions forced the Moscow Exchange to trade dollars and euros onto the over-the-counter markets. According to VTB Chief Financial Officer Dmitry Pyanov, the new sanctions forced the Shanghai branch into a period of “adaptation to new realities.”

By June 20, payments made via VTB Shanghai had stopped reaching Russian suppliers. The money is sent to VTB Shanghai, but is then blocked and unable to go to its intended recipients.

The incident underlines the Kremlin’s desire to accelerate the development of alternative modes of payment, particularly new digital technologies like CBDCs and other digital assets that are outside the purview of Western sanctions.

Follow CurrencyReset.news for more stories about CBDCs.

Watch the video below about Russia’s pilot launch of the digital ruble.

This video is from the High Hopes channel on Brighteon.com.