The Central Bank of Russia has announced that it is studying the need to create a national digital currency that will circulate as legal tender alongside the ruble. Although no decision has yet been made, many view the creation of a digital ruble as necessary to meet the ever-changing needs of Russian citizens and businesses as well as to keep up with innovations in financial and economic markets around the world. The creation of a digital ruble will also help combat the increasing popularity of cryptocurrencies, which are set to become prohibited from use for the payment of goods and services in Russia starting in 2021.
Should the Central Bank decide to move ahead with the creation of a digital ruble, it will require significant planning and infrastructure development. The benefits, however, are numerous. A national digital currency will lead to lower transaction costs for consumers, increased financial inclusion and increased competition among financial institutions.