The digital ruble law, approved by Russian President Vladimir Putin, goes into effect on August 1. Along with cash (paper money) and non-cash (bank cards), the digital ruble will become the third type of national currency, Sputnik reported.

Last week, Putin signed a law on the digital ruble in Russia. The relevant document is published on the official legal information portal. It introduces the basic concepts necessary for the introduction of the digital ruble. The Bank of Russia Board of Directors will set the tariffs on digital currency transactions.

From a technological aspect, the digital ruble is a computer code that is kept in the Central Bank and will be issued by the monetary authorities, the news agency indicated.

The public quickly recognized its similarities to cryptocurrency. However, as economists point out, there is one critical difference: the digital ruble is issued and backed by the Russian state, whereas cryptocurrencies are produced during the mining process and are only supported by the crowd, Sputnik explained.

It continued that for a variety of reasons, the digital ruble is regarded as helpful to society and the state. To begin with, by making transactions more transparent, the digital currency will aid in the fight against corruption and tax evasion.

Another critical aspect to emphasize is that the government can specify the specific aim of a monetary allocation to avoid any instances of money laundering, embezzlement, or theft of public funds, the news agency pointed out.

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