A new law that has come into force in Russia equates the digital forms of currency units from other countries with foreign currencies, giving them legal recognition. The standard includes central bank digital currencies (CBDC) in this category, marking a milestone in the regulation of this type of currency.
From August 1, 2023, Foreign currency units issued in digital form are legally recognized in Russia. This is based on the changes made Federal Law No. 173-FZ “For the regulation and control of foreign exchange,” which stipulates that digital currencies issued by the central bank or institutions of foreign states “are considered foreign currencies when they are in circulation and are legal tender in their country of origin.”
Therefore, There will be no restrictions on transactions with these CBDCsThis opens the doors to accepting currencies like China’s digital yuan or Nigeria’s eNaira in Russia, some of the most advanced digital currencies in the world.
The new regulation, which gives legal status to digital currencies of foreign central banks, is included in a recently passed regulation. CriptoNoticias reported in late July last year that President Vladimir Putin approved the new law regulating the digital ruble, Russia’s CBDC. Hence with this legislation could pave the way for a new international payment system.
Accordingly collect According to Russian newspaper CNEWS, the regulations approved by Russia are related to tests conducted by the Bank for International Settlements (BIS) for the use of CBDCs in cross-border payments.
In this sense, the BIS experts think Digital currencies offer a more reliable transaction mechanism than traditional systems like SWIFT, an international system from which Russia was expelled in 2022 after its invasion and the start of the war with Ukraine.
According to the agency’s report, titled “Bridges of Trust and Fund Flows,” the creation of a global platform for digital currency remittances (a plan managed by the International Monetary Fund) could improve efficiency and transparency in international payments.
Russia, in the list of countries with its CBDC
According to Russian lawmakers, the new law on the digital ruble aims to protect citizens’ funds and reduce dependence on foreign currencies and cryptocurrencies.
However, It has disadvantages such as the lack of refunds and the impossibility of earning interest for deposits in digital rubles. In addition, a survey shows that 28% of Russians polled do not trust this new financial instrument.
Despite all these advancesRussia joins the list of countries exploring the potential of digital currencies. Countries that have already implemented or started CBDC pilot projects include the Bahamas, Jamaica, China, Central Bank of the Eastern Caribbean, Nigeria, India, Ghana, Canada, United Arab Emirates, Saudi Arabia, Uruguay, France and Iran .