Russian Federation CBDC Tracker

CBDC Information

CBDC Status

Launched

CBDC Launch

2023-08-15

CBDC Model

Retail

Economic Information

Monetary Base

$280,651,941,270

Cash Issued

$200,362,420,758

GDP

$2,240,420,000,000

Country Information

Freedom Rankings

Cato and Fraser Human Freedom Index:

5.81/10

Freedom House Index:

1.6/10

Reporters Without Borders Freedom Index:

3.47/10

Russia is in the launched phase. The Bank of Russia announced that it would begin piloting a CBDC on August 15, 2023. However, Russia is considered to be in the launched phase because, like the CBDCs in China and India, this pilot is open to the public. Currently, the pilot involves 13 banks and an estimated 600 of their clients. Another 17 banks are expected to join soon. The Bank of Russia said that the pilot is first meant to test establishing accounts and conducting basic transactions across 30 points of sale in 11 cities.

CBDC History and Development

The Bank of Russia claims that a CBDC will benefit citizens by providing access through existing banks, uniform rates, offline use, security, and improved customer service. However, the chair of the Duna Committee of the Financial Market Anatoly Aksakov said, “No matter how great the student’s desire to use his mother’s digital ruble for unhealthy sweets, it will not be possible to use the money for other purposes. The intended purpose of the money allocated by the parents to the child will be specified in a special smart contract. A similar approach is applicable when directing government funds to implement various programs by contractors or individuals. This budget money will be used in a targeted manner for the implementation of exactly those projects for which they were intended, which will lead to an increase in the efficiency of circulation of public funds.” Aksakov further said that amendments were written specifically to ensure that the CBDC is “not used for unseemly purposes.”

Assuming the pilot goes as planned, the Bank of Russia expects to issue a CBDC (referred to as the digital ruble) to the entire public in early 2025. Bank of Russia first deputy governor Olga Skorobogatova said, “[B]oth individuals and businesses will be able to actively use the national digital currency, of course if they wish to.”

In January 2024, Kommersant reported that the Bank of Russia was organizing resources to launch telephone support lines for customer service. It was later reported in March 2024 that there had been 25,000 transactions since the CBDC was kicked off. Bank of Russia governor Elvira Nabiullina said that the testing is going according to plan and that there were plans to add another 19 banks to the project.

Human Rights and Civil Liberties Concerns

Russia is riddled with concerns and earned a 16 out of 100 in Freedom House’s 2023 Freedom in the World report. Concerns in Russia are vast, but those directly related to the use of CBDCs include corruption and oppression of dissenting voices.

Rampant corruption “in the government and the business world is pervasive, and a lack of accountability enables officials to engage in malfeasance with impunity,” according to Freedom House. Furthermore, “Many analysts have argued that the political system is essentially a kleptocracy, a regime whose defining characteristic is the plunder of public wealth by ruling elites.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

Efforts to restrict protests and dissenting voices are also all too common. Russia’s invasion of Ukraine has only seemed to exacerbate this issue. Freedom House reports that “Moscow cracked down on domestic dissent, including by criminalizing antiwar demonstrations in March.” Furthermore, “Some 13,500 people were arrested in early March, while nearly 2,400 more were detained within days of the September mobilization announcement.” Similar tactics have also been used to target political rivals. Again, as reported by Freedom House, “Opposition politicians and activists are frequently targeted with fabricated criminal cases and other forms of administrative harassment designed to prevent their participation in the political process.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.