Digital ruble enters Russia, but citizens prefer cash

Russia has officially launched its digital ruble, with the central bank announcing its availability starting September 1. Initially, 12 of the largest Russian banks are mandated to conduct transactions using the new digital currency, though participation is currently voluntary. Elvira Nabiullina, the head of Russia's central bank, stated that the technical infrastructure is ready after extensive preparatory work.

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Technically, everything is ready; we have carried out extensive preparatory work for this stage.

While the digital ruble promises the Kremlin enhanced oversight of budget fund utilization and potential applications for public sector salaries, it is met with significant public skepticism. Many Russians do not understand the necessity of this third form of money, alongside cash and traditional non-cash transactions. A VTsIOM poll indicated that the digital ruble remains an "abstract category" for most, with a SuperJob survey revealing only 10% of working Russians are willing to receive their entire salary in digital rubles, and another 5% would consider receiving a portion.

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The digital ruble remains for most an 'abstract category' that is difficult to understand.

This distrust is amplified by the unpredictable nature of the Kremlin and the ongoing impact of the war. Russians are increasingly turning to physical cash, driven by fears of internet disruptions and potential deposit freezes. Sberbank has reported a surge in customers closing fixed-term deposits and withdrawing funds. Although the central bank initially planned for offline payment capabilities, this feature is not yet implemented.

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Only one in ten working Russians is willing to convert their entire salary into digital rubles, while another 5% would be willing to receive part of their income this way.

Despite the public's reluctance, the Bank of Russia is pushing forward with the digital currency's development. While initially only the central bank can open user wallets, Nabiullina mentioned the possibility of allowing commercial banks to do so in the future. "This project is developing... We want the digital ruble to be truly desired by people and companies, to be convenient... We see huge potential in using smart contracts in business," she stated, aiming to make the digital ruble appealing to both individuals and corporations.

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This project is developing... We want the digital ruble to be truly desired by people and companies, to be convenient… We see huge potential in using smart contracts in business.