The Concerns of Financial Industry Experts
As Russia prepares for the rollout of its central bank digital currency (CBDC), experts in the financial industry have expressed their concerns about the potential impact on the commercial banking sector’s liquidity. At a recent banking conference, Tatyana Rozhdestvenskaya, a professor of financial law at the Kutafin Moscow State Law University, pointed out the limitations of the digital ruble. She stated that it would be “impossible to issue loans […] or accrue interest” using the digital ruble.
“It would be impossible to issue loans […] or accrue interest.”
– Tatyana Rozhdestvenskaya
Irina Mikheeva, another academic from the same university, acknowledged that banks would certainly be impacted by the introduction of the digital ruble. She emphasized that ongoing pilots may not affect commercial banks directly, but a national rollout would significantly affect the sector.
“Ongoing pilots may not affect commercial banks, but a national rollout would.”
– Irina Mikheeva
Maxim Bashkatov, the legal development chief at the Center for Strategic Research, suggested that adoption of the digital ruble may need to be incentivized to gain public acceptance. He also highlighted that without specific categories of payments that can only be made in digital rubles, the adoption progress would likely be voluntary and in small quantities.
“Adoption of the digital ruble may need to be incentivized to win over the general public.”
– Maxim Bashkatov
It is worth noting that Russian commercial banks have previously expressed anxiety about the digital ruble, and their customers remain “wary” of this new form of currency.
The Central Bank’s Focus and Plans
While the concerns from the commercial banking sector persist, the Central Bank of Russia seems to be primarily focusing its efforts on using the digital ruble in the trade and commerce sectors. Andrey Borisenko, Deputy Director of Legal Affairs at the Central Bank, assured attendees at a conference that “cross-border digital fiat transfers” would not impact international exchange rates.
“Cross-border digital fiat transfers” would not affect international exchange rates.
– Andrey Borisenko
The Central Bank has also shown increased interest in using the CBDC for cross-border trade, with plans to potentially launch pilots with countries like Belarus and Kazakhstan, which have already started their own CBDC pilots with a focus on “cross-border” functions.
Additionally, there are reports suggesting that the Central Bank may launch the second phase of its CBDC pilot before the end of the year. This phase would involve the introduction of dynamic QR code functions in digital ruble transactions and the piloting of business-to-business transfers in 2024.
However, some officials within the banking sector are dissatisfied with the State Duma’s involvement in the CBDC pilot. Alexey Guznov, Deputy Chairman of the Central Bank, expressed his belief that Russia has made little progress in regulating digital assets and currencies, emphasizing the need for more comprehensive legislation regarding the use of CBDCs and other digital assets in cross-border payments.
“Russia has made little progress in regulating digital assets and digital currencies.”
– Alexey Guznov
