The digital ruble should be used for control: Refreshing honesty from senior Russian lawmaker

The ability to limit how digital rubles can be spent creates "new opportunities" for the government, according to State Duma Deputy Anatoly Aksakov

image credit: russia.ru

Restrictions on how digital rubles can be spent will be gradually introduced after the Bank of Russia’s CBDC enters mass circulation, Anatoly Aksakov, head of the State Duma Committee on Financial Markets, told Rossiyskaya Gazeta in an interview.

The senior lawmaker revealed that the Russian government was already discussing “possible usage scenarios” for the digital ruble, which can be programmed to limit or prohibit certain kinds of purchases.

As an example, Aksakov proposed using the digital ruble to issue maternity capital and child benefits so that these funds “can’t be spent on alcohol and cigarettes”.

Such restrictions would be “justified and necessary” since “social support measures would clearly become more effective”, Aksakov explained.

The lawmaker continued:

“This applies to social payments and other forms of government spending. In my opinion, the benefits in this case outweigh the arguments that it is wrong to issue both free and non-free digital rubles at the same time. Control is needed; there is no other way.”

Russian citizens will also be able to make use of the digital ruble’s programmability, the Duma Deputy said.

“Not only the state will be able to use the new opportunities, but also the people themselves. When parents give their child money for school expenses, they want him to buy himself a lunch, not a pack of cigarettes or something worse. Or spend it all on video games, or give it to scammers. In the future, they will be able to establish such restrictions.”

Aksakov predicted that “balanced decisions” about control measures would be “gradually” implemented once the digital ruble enters mass circulation.

However, the Bank of Russia has repeatedly denied that such “balanced decisions” are even being considered, insisting that “the choice of which form of ruble [cash, non-cash, or digital] to use will remain with the citizens” and “you can spend your digital rubles as you see fit.”

The Bank of Russia also dismissed as a “myth” the claim that social payments will be issued exclusively in digital rubles.

The Bank of Russia debunks a “myth” about the digital ruble. source: cbr.ru

Aksakov’s comments also undermine the claim that digital rubles can be freely converted into cash or non-cash rubles.

Russians have been reassured that they can transfer digital rubles from a digital wallet into a bank account, and then withdraw these funds as cash. But how can digital rubles programmed to prohibit certain purchases be converted into cash? And if “colored” or “non-free” digital rubles can simply be transferred to a bank account and withdrawn at an ATM, what is the point of trying to control how they are spent in the first place?

To summarize:

• Will the digital ruble be mandatory in order to receive certain forms of social payments? According to Aksakov, yes.

• Will restrictions be placed on how these funds can be used? According to Aksakov, yes (“gradually” and in a “balanced” way).

• Will digital rubles be freely convertible into cash or non-cash rubles? Only the “free” kind, apparently.

Perhaps this is why Vedomosti wrote in December 2021:

Blockchain consultant and cryptocurrency researcher Denis Smirnov is critical of the idea of ​​the Central Bank: “For people, the introduction of the digital ruble is the realization of the most terrible scenarios described by science fiction writers in dystopias.” According to the expert, with the advent of the digital ruble, absolute transparency will reign in the field of personal finance, which means that the human right to privacy will be under attack.

In July 2024, Russian President Vladimir Putin called for the “full-scale implementation” of the digital ruble, which became Russia’s third form of legal currency in 2023.

Originally slated for launch this summer, the Bank of Russia’s CBDC is expected to enter circulation at the start of 2026.

---