The Digital Ruble: Russia’s New Weapon Against Sanctions
Russia has begun testing its new digital ruble, which will use blockchain technology to avoid sanctions and increase control over its inhabitants. The decision comes as the ruble continues to fall against the dollar and as the war in Ukraine escalates. After Western sanctions hindered Russia’s access to the global banking system, the digital ruble gained traction. According to the Atlantic Council research group, Russia has joined 20 other countries in the pilot stage of developing a digital currency.
Moscow’s principal goal is to increase the flexibility of its financial system and lessen the impact of foreign constraints. Russia can avoid sanctioned institutions by introducing the digital currency, because blockchain technology is more difficult to penalise and attack. Russia hopes to de-dollarize its economy and reduce its dependency on US money for trade by issuing digital currency.
However, academics have expressed reservations about the consequences of digitising the ruble. While it offers secure, rapid, and convenient payments for individuals across Russia, it also gives the Kremlin vast power. This control can be used as a social control tool, allowing authorities to levy penalties or freeze assets with the touch of a button. Researchers have warned that data obtained through the digital ruble might be used to snoop on citizens’ private transactions in the wrong hands.
Despite the testing period, ordinary Russians are wary about utilising the digital ruble. According to a survey done by the state-owned pollster VCIOM, six out of ten Russians have a poor comprehension of the government’s goals and are unwilling to embrace the currency. Economists believe that during the testing phase, there will be little influence on people’s and businesses’ daily life. To allay popular fears, Russian authorities have stated that the usage of the digital ruble will be voluntary, emphasising its potential to make Russians’ lives easier.