Bank of Russia Claims Digital Ruble Issuance Won’t Cause Inflation

Bank of Russia assures that the issuance of the digital ruble, the country’s CBDC, will not lead to inflation or disrupt the existing monetary system. The central bank clarified that the introduction of the digital currency will not impact the mechanisms used to control inflation or the amount of money in circulation. In a draft outlining its policies for 2025-2027, the Bank of Russia emphasized that it will continue to manage money market rates and provide liquidity to banks as before. The digital ruble, which is a retail currency, will enable users to make direct payments, similar to the Chinese digital yuan. Analysts have expressed concerns about the potential effects of the digital ruble on the Russian economy, but the central bank maintains that it will not cause inflation and will only increase the demand for cash and digital funds, without altering money issuance. The Bank of Russia also stated that the existing two-tier structure of the banking system will remain intact, with credit institutions playing a crucial role in providing custody for people’s savings. These institutions will have to support the digital ruble by offering account services and facilitating transactions. The central bank expects the digital ruble to gain widespread adoption by 2025, offering an alternative to traditional payment and monetary systems.