What is the digital ruble?

On October 1st, a new monetary era began in Russia—the digital ruble entered circulation. This is neither a cryptoasset nor an "IT toy," but a third form of national currency (after the cash and non-cash ruble), existing exclusively in digital form and hosted by the Central Bank. Right now, during the first phase of implementation, the state will use it only for certain budget payments, but by 2026, benefits, public sector salaries, and pensions are promised to be paid digitally. The transition is promised to be smooth and voluntary: cash and non-cash rubles will remain in circulation. Some experts call this innovation a step toward a transparent economy and budget savings, while others fear total state control over financial transactions.

"If before you had a choice between cash or a card, now you also have a digital wallet," is how experts explain to Russians what exactly happened on October 1st. On that day, the law on the digital ruble came into effect, giving the country a third form of national currency.

For now, this all seems more like an experiment: at the first stage, digital rubles will be used only for certain federal payments, which the government coordinates with the Central Bank. Over time, the digitalization will encompass all budget transactions: federal expenditures from January 2026, regional budgets from July 2027, and municipal ones a year later. Citizens will begin to feel the real impact when public sector salaries, pensions, and benefits are transferred not only to bank cards but also to digital wallets. The Central Bank of the Russian Federation promises that this will be entirely voluntary: if a citizen wants to be paid in digital rubles, they will receive them; if they don't, they won't.

Technically, it's simple: every Russian will be able to open a digital wallet with the Central Bank via a mobile app or the government services portal. Transfers between citizens will be free, and goods and services can be paid for using a smartphone—or, more precisely, a QR code, which has become familiar to many since the COVID-19 pandemic. "The key feature is that the digital wallet is not linked to a commercial bank, but rather is hosted by the Central Bank. This means a higher level of security for funds—essentially, a state guarantee," explains Ivan Samoylenko, Managing Partner of B&C Agency.

For businesses, the digital ruble promises cost savings: retailers will no longer have to pay acquiring fees to banks, and the state will receive a transparent expense tracking tool. Finance Minister Anton Siluanov explicitly stated that the digital currency will allow for more precise control over the targeted use of budget funds. Experts estimate that savings for the banking system could amount to up to 8 billion rubles per year, and for businesses as a whole, up to 50 billion.

But not everything is so smooth. "The main purpose of introducing the digital ruble for the budget today is to save on transactions. But for the public, it doesn't yet appear to be an advantage: there are still few retailers and service providers willing to accept such payments," notes Elman Mekhtiev, CEO of the Association for the Development of Financial Literacy. According to a recent VTsIOM survey, 40% of Russians see no benefit at all from the new form of currency.

Skepticism is also heightened by everyday details. Cashback won't be awarded for digital spending, and loans can't be paid with digital rubles. For the elderly or residents of remote regions, navigating the app could be a challenge. "For socially vulnerable groups, the transition promises convenience—money will arrive faster, almost instantly. But for small retailers, the adaptation process could be lengthy. And digital literacy isn't yet at the required level for everyone," comments Andrey Glushkin, a member of the Delovaya Rossiya Council.

Nevertheless, supporters of the new system are confident it will have a positive effect. "The digital ruble has the potential to eliminate intermediaries in transfers and reduce the risk of fraud. For the budget, this is a step toward greater transparency, and for people, it's a step toward convenience," says Natalia Milchakova, leading analyst at Freedom Finance Global. She points out that bank cards were once viewed with suspicion, but today, they are used by virtually everyone, young and old, almost everywhere.

In short, the digital ruble is the state's attempt to integrate a technology into everyday life that can make payments cheaper, faster, and more secure. But how quickly this "third form of money" becomes commonplace depends not only on the Central Bank and the Ministry of Finance, but also on the readiness of businesses and citizens themselves. For now, all we can say is that, as of October 1, Russia began to live not in two, but in three monetary dimensions.