Russia's move to avoid sanctions, towards digital ruble

Russia’s move to avoid sanctions, towards digital ruble

Amid a fall in the value of Russia’s real currency, which has reached its lowest level since the start of the invasion of Ukraine, the country’s Central Bank has officially adopted it. Digital Ruble. This new state-owned cryptocurrency was launched in a pilot phase on August 15 and currently only includes 13 banks and a small number of customers in 11 Russian cities. Moscow’s main goal is to use this new digital currency to avoid Western sanctions; However, some analysts believe that it can also be used to increase social control over the population.

The development of the digital ruble had been discussed for years, but the project gained momentum especially after Russia has been excluded from the SWIFT system, After the aggression against Ukraine, the dollar became a major international financial instrument for transactions. One of the most influential sanctions measures have caused significant damage to the Russian economy.

Russia’s problems

In addition to the ban on products such as oil and gas and the termination of commercial relations with many Western companies, exclusion from the SWIFT system represents a significant portion of the heavy lifting. Sanctions imposed on Russia. These economic attacks have been partly prevented by Moscow through trade with countries not included in the sanctions, the use of financial circuits based on currencies other than the dollar, and the adoption of cryptocurrencies.

In fact, the introduction of the digital ruble is one of the methods by which the state seeks to take control digital transaction, making the financial system more resilient to sanctions and out of control of restricted banks. The move is part of a wider geopolitical contest between countries supporting the use of the dollar in international financial transactions and anti-dollar countries seeking currency alternatives.

Russian leader on July 24 Vladimir Putin signed a law to officially introduce the digital ruble, a new digital currency managed by the Central Bank. This marks the official launch of the digital currency, which took place on August 15 in a trial phase limited to 30 locations in 11 Russian cities and involving 13 banks.

digital ruble

Selected users can already create digital wallets, make peer-to-peer transfers, automate payments and make purchases Code QR. According to an announcement made by the Russian Central Bank, this testing phase should be completed by the end of 2023, with the entry of 19 more banks into the system and the opening of the platform for cross-border payments. Currently, the Russian authorities assure that the use of the digital ruble will be free and completely voluntary until 2025.

However, according to some experts, how mikael frontThe founder of the cryptocurrency-focused investment fund Ark36 can put serious pressure on the population, especially businesses, to adopt the Moscow digital ruble. Its mass adoption could give the government a greater ability to control the population, becoming a definitive tool for social control. This is because the government would have immediate and unconditional access to every financial transaction, as well as the power to authorize or deny them.

This aspect is not hidden by the Russian regime, but is also publicized by some political representatives. Anatoly AksakovA Russian lawmaker pointed out that the digital ruble, for example, would allow minors to limit access to funds loaded into digital wallets, authorizing only certain types of transactions and blocking others. In short, the digital ruble could become a powerful tool of social control in the hands of the Russian government.





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