November 13, 2021

Russia to Launch Digital Ruble


Russia to Launch Digital Ruble
One ruble. Wikimedia Commons user Orange-kun

Russia is getting ready to test out the digital ruble, and it is not alone in launching a digital currency. But people who are not cryptocurrency enthusiasts want to know: What is a digital currency?

A digital version of a currency can be thought of as a third form of money: the first being cash, the second being non-cash (for instance, the money that gets direct-deposited into your bank account by your employer), and the third, for example, the digital ruble. The three types of currency are equivalent but probably difficult to understand. How is a digital ruble any different from a ruble direct-deposited by an employer?

The Russian Central Bank emphasizes that the digital ruble is not a cryptocurrency. Cryptocurrencies are decentralized (not issued by a government), and the identity of a holder is often impossible to determine unless the holder outs himself/herself. In contrast, the digital ruble will be held in electronic wallets "located" in the Central Bank.

Naturally, then, the digital ruble makes it easier for a government to track where all the money is going. Especially if people are not paying taxes on their under-the-table income (ahem). In many ways, digital currency is the opposite of cryptocurrency – though the idea and the digital infrastructure certainly came from that industry. One Russian blockchain and cryptocurrency expert says that the digital ruble will create the equivalent of the State Bank of the USSR. Another advantage of the digital ruble, according to Russian authorities, will be avoiding Western sanctions.

But this move is not limited to Russia. The United States and European Union are working on the digital dollar and euro, respectively, at the moment. China leads the pack, already using the digital yuan.

If you are thinking that cryptocurrencies are very prone to scams and hacks, and how is digital currency any different? – well, you're right. The fact is, the Russian government estimates it will need to spend R20-25 billion/$282.7 million (will those be cash or digital rubles?) to secure the system.

Many nations will have their digital currencies ready in the next 5-7 years. Russia had hoped to test the digital ruble in 2021, but with China already doing it, there is no hurry now. In fact, as Lenta.ru points out, watching other countries do it first can allow Russia to avoid all of their mistakes.

If you still do not quite understand how it will work... join the club. We guess we'll all find out soon.

You Might Also Like

Dirty Money
  • July 07, 2021

Dirty Money

“We are strengthening the protection of banknotes from the effects of harmful microorganisms.” – On July 5, Deputy Chairman of Russia’s Central Bank Mikhail Alekseev explained plans for the modernization of Russia’s bank notes
Coming Up Roses
  • March 19, 2021

Coming Up Roses

After one year of pandemic, Russia's economy is looking dandy while others are on the verge of collapse. Or so says new research.
Like this post? Get a weekly email digest + member-only deals

Some of our Books

Murder at the Dacha
July 01, 2013

Murder at the Dacha

Senior Lieutenant Pavel Matyushkin has a problem. Several, actually. Not the least of them is the fact that a powerful Soviet boss has been murdered, and Matyushkin's surly commander has given him an unreasonably short time frame to close the case.

Murder and the Muse
December 12, 2016

Murder and the Muse

KGB Chief Andropov has tapped Matyushkin to solve a brazen jewel heist from Picasso’s wife at the posh Metropole Hotel. But when the case bleeds over into murder, machinations, and international intrigue, not everyone is eager to see where the clues might lead.

Davai! The Russians and Their Vodka
November 01, 2012

Davai! The Russians and Their Vodka

In this comprehensive, quixotic and addictive book, Edwin Trommelen explores all facets of the Russian obsession with vodka. Peering chiefly through the lenses of history and literature, Trommelen offers up an appropriately complex, rich and bittersweet portrait, based on great respect for Russian culture.

A Taste of Chekhov
December 24, 2022

A Taste of Chekhov

This compact volume is an introduction to the works of Chekhov the master storyteller, via nine stories spanning the last twenty years of his life.

Little Golden Calf
February 01, 2010

Little Golden Calf

Our edition of The Little Golden Calf, one of the greatest Russian satires ever, is the first new translation of this classic novel in nearly fifty years. It is also the first unabridged, uncensored English translation ever, and is 100% true to the original 1931 serial publication in the Russian journal 30 Dnei. Anne O. Fisher’s translation is copiously annotated, and includes an introduction by Alexandra Ilf, the daughter of one of the book’s two co-authors.

Driving Down Russia's Spine
June 01, 2016

Driving Down Russia's Spine

The story of the epic Spine of Russia trip, intertwining fascinating subject profiles with digressions into historical and cultural themes relevant to understanding modern Russia. 

Fish
February 01, 2010

Fish

This mesmerizing novel from one of Russia’s most important modern authors traces the life journey of a selfless Russian everywoman. In the wake of the Soviet breakup, inexorable forces drag Vera across the breadth of the Russian empire. Facing a relentless onslaught of human and social trials, she swims against the current of life, countering adversity and pain with compassion and hope, in many ways personifying Mother Russia’s torment and resilience amid the Soviet disintegration.

About Us

Russian Life is a publication of a 30-year-young, award-winning publishing house that creates a bimonthly magazine, books, maps, and other products for Russophiles the world over.

Latest Posts

Our Contacts

Russian Life
73 Main Street, Suite 402
Montpelier VT 05602

802-223-4955