Russian Ministry of Industry Proposes Two-Year Transition Period for Digital Ruble Adoption

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November 27, 2024

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Russia’s Ministry of Industry has proposed a two-year transition period to ease the implementation of digital ruble payments in the retail sector. This is to give businesses ample time to adjust to the system.

Ministry Pushes for More Time on Digital Ruble Adoption

The Russian Ministry of Industry has called for a delay in the rollout of digital ruble payments, stressing the lack of infrastructure preparedness. The ministry expressed concerns over the potential challenges businesses could face in meeting the 2025 deadline, which mandates large retailers to accept payments in the central bank digital currency (CBDC).

According to a report by state-controlled media outlet Izvestia, the ministry argued that a rushed transition could harm business operations due to insufficient preparation.

The draft law, which would require large retailers to adopt digital ruble payments by July 2025, has raised alarms among business owners and stakeholders. Smaller businesses would have a later deadline, depending on their annual revenue.

The Ministry of Industry, in response, recommended a two-year delay to allow sufficient time for businesses to finalize operational guidelines, update software, and train staff.

The infrastructure required for the full rollout of the digital ruble is still in development.

The ministry’s concerns highlight the challenges involved in integrating the new currency into existing payment systems.

“The lack of clear operational guidelines for the digital ruble, along with the need for software updates and staff training, justifies the call for a two-year transition period,” the ministry said in its official statement.

Gradual Rollout and Future Projections for the Digital Ruble

According to a recent report by the Atlantic Council, 134 countries, accounting for 98% of the global economy, are now exploring CBDCs. This marks a significant increase from just 35 countries in 2020.

The Bank of Russia is already conducting pilot programs for the digital ruble, and central bank governor Elvira Nabiullina has indicated that mass adoption could happen by July 2025.

However, she emphasized that this transition will occur gradually. The head of the Bank of Russia pointed out that the widespread use of the digital ruble is likely to take between five to seven years.

The Ministry of Industry’s proposal for a transition period is in line with other global efforts to manage the complexities of CBDC adoption.

Countries like China, which had previously launched pilot tests for their digital yuan, have faced setbacks. It was revealed that the digital yuan project “failed,” citing this as a sign of President Xi Jinping’s “weakening power.”

Meanwhile, regions like the European Union are still in the early stages of designing their CBDCs.

In addition to the Ministry of Industry’s call for a two-year transition period for the digital ruble, Russia has also seen a significant change in leadership. Olga Skorobogatova has resigned from her position as the first deputy governor of the Bank of Russia.