Yesterday, the Russian government signed a law introducing a central bank digital currency (CBDC) along with a corresponding electronic platform. The short document avoids any mention of privacy, presumably suggesting that the Bank of Russia could have access to customers’ personal data. It also allows individuals to bequeath rights to a digital ruble account, giving heirs the right to inherit CBDC funds from a testator in the event of death.

Russia’s new CBDC law

The new law comes after months of delays in Russia’s State Duma, which had delayed legislation needed to introduce the digital ruble. It was recently modified to allow its use by non-residents. Now that President Vladimir Putin has signed the document into law, the central bank will be able to go ahead with the live pilot that was scheduled to start in April.

In particular, the document seems quite short. While the recent digital euro note was 62 pages long, the Russian law is only four pages long. It refers to the introduction of a “third form of money” to complement existing physical banknotes and electronic money from commercial banks, and modifies existing articles of the Russian civil code.

Questions about CBDC privacy

One thing that stands out is the conspicuous absence of privacy provisions. Once again, the digital euro note mentioned privacy on 21 pages, but the digital ruble law gives significant powers to the Bank of Russia. The central bank had previously stated that it could ban access to the digital ruble by certain institutions, companies or individuals. It is not clear if this legislation allows this, but it seems likely. If so, this could make the digital ruble the kind of surveillance tool that worries many in the West.

The text also inserts a supplementary clause suggesting that the Bank of Russia will be in charge of “opening and maintaining digital ruble accounts.” It is unclear whether this means that the central bank will complement the work of commercial banks, but this is in contrast to the ECB’s approach, which explicitly states that payment service providers will operate the accounts and the Eurosystem the payment system.

CBDC inheritance possibility

Finally, the new law allows the inheritance of digital rubles from deceased relatives. According to TASS, the Russian news agency, “the document provides for the possibility of bequeathing rights to digital rubles, including through testamentary dispositions.” However, the rules for how this will work have yet to be formulated by the Russian government with the cooperation of the Bank of Russia.

TASS noted that the legislation does not allow digital ruble-denominated loans and prevents the use of the term “digital ruble platform” or something similar in advertising.