Putin Gives the Nod to Tax Law for Russian Digital Ruble

Crypto News- Russian President Vladimir Putin has given his approval to a new law that incorporates the digital ruble into the country’s tax code. This legislative move introduces terms such as “digital ruble” and “digital ruble wallet” into the tax code, empowering authorities to recover Central Bank Digital Currency (CBDC) funds from wallets in instances where taxpayers do not have sufficient traditional currency in their bank accounts. The law also grants tax authorities the ability to temporarily halt transactions on digital ruble wallets and request platform operators to furnish documents confirming fund transactions, with confiscated coins being transferable to the Russian Treasury.

Putin Gives the Nod to Tax Law for Russian Digital Ruble

This marks the second major law related to CBDCs in 2023 as Russia pushes for a swift implementation. While the Ministry of Finance envisions that all Russians will be able to use digital ruble wallets for payments by 2024, the Central Bank suggests that a nationwide rollout may not happen until 2025.

Russia Moves Forward in Implementing the Digital Ruble

Key components of the law outline the Central Bank’s responsibilities as the operator of the digital ruble platform, taxation rules for digital ruble transactions (including VAT exemptions for account opening and holding), and procedures for the transfer of CBDC funds.

Against the backdrop of ongoing sanctions from the US and EU affecting the Russian economy, Moscow views the digital ruble as a strategic tool in international trade. Officials believe that the CBDC will play a crucial role in reducing costs and risks for domestic firms engaged in foreign trade. Deputy Minister of Finance Alexey Moiseev has expressed eagerness for Russia to conduct business using its CBDC, especially within the Eurasian Economic Union (EAEU), a bloc comprising former Soviet states.

While the digital ruble is currently being piloted in 11 cities with 13 partner banks, including Sber, additional banks are expected to join the trial in the coming year. The finance ministry aims to leverage the CBDC for government subsidies and welfare payments starting in 2024. Belarus and Kazakhstan, also EAEU members, are simultaneously progressing with their own CBDC projects, emphasizing cross-border trading functions. Furthermore, Russia has shown interest in conducting CBDC transactions with China, although Beijing’s stance on the matter remains uncertain.