Since April, the Russian currency has a “third form” – the digital ruble. Its main advantage is the speed of settlements, security and access to money regardless of the bank, experts explain. The bill on the digital ruble is still being considered in the State Duma, but innovation has a great future in the future. If in the pilot project we are talking about several simple operations, then in the future digital rubles can also be used for social payments. Details — in the cryptonewsherald article.
What is a digital pension, when will a digital pension
A package of bills on the digital ruble is undergoing the first reading in the State Duma. It was planned that it would be adopted by April 1, but now the deadlines are being shifted towards the end of the month. Anatoly Aksakov, head of the State Duma committee on the financial market, explained that the bill is likely to come into effect in May. At first, we will focus on the simplest operations: transfers between individuals and payment for purchases.
Photo: RIA Novosti / Igor Zarembo
The digital ruble is a unique code stored on a special digital wallet. A digital ruble is transferred from one user to another by moving the code from one electronic wallet to another. According to the long-term plans of the Central Bank, in the future it will be possible to pay not only pensions, but also salaries in digital rubles. Deciding in what form to receive payments: in cash, on a card or digital rubles —will remain with the end user.
How does a digital pension and a digital ruble differ from money “on a card”
The digital pension will differ from the usual one only in the form of the ruble. The size of the payout, the ability to transfer and spend money will remain the same as with regular accruals.
Cash is issued by the Central Bank. Non-cash money is tied to the account, but it is not the Central Bank that issues them, but commercial banks. In fact, non-cash rubles are a record on electronic bank accounts and cards that their client owns a certain amount of money. As long as they are stored on an electronic account in the form of a record, the bank can use them at its own discretion: issue loans, invest. Non-cash money is fully convertible into cash and vice versa.
Digital rubles are similar to non-cash ones in that they are not stored in a wallet, but on a separate digital wallet. At the same time, they are similar to cash in that they are issued directly by the Bank of Russia. The main difference is that commercial banks will not have access to digital funds of citizens; they plan to store all accounts directly on the servers of the Central Bank. Digital rubles are an obligation to the client not of the bank, but directly of the state, and they will be paid regardless of what happens to this or that financial institution. This “third form of the ruble” is fundamentally different from cryptocurrencies.
Photo: cryptonewsherald/Alexander Kazakov
Digital money can also be transferred from one form to another – and access to them will be from the application of the bank in which the user has an account. Since the exchange rate of the digital ruble will be 1:1, it will not be possible to make money on the difference. It will be possible to pay using the digital ruble both online and – in the future – offline.
Digital pension: who receives, who pays
Not all banks received access to the digital ruble. The pilot project includes 13 leading financial institutions that will start testing operations with the third form of the ruble after the bills are approved. Thus, there is no talk of digital pensions yet.
Can the digital ruble “burn out” or “zero out”
Along with the emergence of the “third form of the ruble”, fears appeared on the Web that digital money could burn out. However, these fears are not true, explained the head of the department of global financial markets and fintech of the Russian University of Economics. G.V. Plekhanov Denis Perepelitsa. According to the expert, digital rubles are tokenized (anonymized and protected in a special way), and a unique identifier will help track the entire transaction history and, if necessary, restore funds. That is, they cannot disappear from the account, as happens during cyber attacks on bank cards, and they cannot be reset either.
Photo: cryptonewsherald / Dmitry Korotaev
It is too early to talk about when pensioners will be able to receive payments in digital rubles, but, according to experts, this will take from three to five years. At the same time, the right to choose between a digital and a regular account will always remain with the pensioner himself.
Who will be affected by the indexation of pensions from April 1
Last year, it was decided to gradually index the social pension. From June 1, 2022, its size increased by 10%, and from April 1, 2023 – by another 3.3%. The overall increase over the nine months will be 13.3%. The increase will affect 4 million people. In addition, some citizens will receive a one-time cash payment of 10,000 rubles by Victory Day. The funds will be credited to combatants, home front workers, widows of war veterans and disabled veterans of the Great Patriotic War. Due to the May holidays, these payments will be made in advance, at the end of April.
Photo: RIA Novosti / Kirill Kallinikov
Also, the indexation of pensions from April 1 awaits disabled people of groups I, II and III. Disabled people of group I will receive 14,306 rubles instead of 13,849 rubles, and disabled children of group I will receive a pension of 17,167 rubles. Disabled people of group II after indexation will receive 7,153 rubles, and disabled people of group III – 6,080 rubles.