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CBDC Launch ‘May Cost Russian Banks $684 Million a Year’

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An image showing bundles of Russian ruble banknotes.
Source: Selensergen/Adobe

Russian commercial banks will lose $684 million a year if the nation’s Central Bank launches a central bank digital currency (CBDC), experts have claimed.

The Central Bank vehemently opposes the adoption of what it calls “private cryptocurrencies” such as Bitcoin (BTC). But the bank wants to expiate the process of launching a digital ruble – which it wants to use to help de-dollarize the national economy.

Finversia reported that the Central Bank’s latest proposal had seen renewed calls for a ban on all domestic crypto transactions. The media outlet quoted the bank’s long-standing, crypto-skeptic governor Elvira Nabiullina as telling reporters that the bank has “not changed its position here.”

She said that the bank had “a negative attitude towards the use of cryptocurrency in the domestic market” and in the “internal settlements” space.

And Nabiullina claimed that plans to launch stablecoins with key Russian trading partners were also far off and needed “more study.”

Central Bank’s CBDC Launch: Why Might it Cost Russian Banks $684m?

The digital ruble is Nabiullina’s pet project. The bank is hoping to launch advanced CBDC pilots sometime this year. And that, say experts, could leave commercial banks out in the cold.

Forklog quoted the Moscow-based business strategy firm Yakov and Partners as estimating that banks stood to lose out if they were no longer needed to process retail and business payments – and if customers could store their funds in Central Bank-operated wallets instead of conventional bank accounts.

The claim echoes warnings from Sberbank, Russia’s biggest banking giant. Sberbank has claimed it could lose up to $54 billion if the Central Bank issues a CBDC.

And Yakov and Partners stated that the only party that was set to benefit from a digital ruble issuance would be retailers. Using a digital ruble, Russian merchants would no longer have to pay bank fees or wait days for banks to complete transactions.

The firm explained:

“The digital ruble has no obvious advantages in terms of convenience of everyday use [for customers].”

On the matter of cross-border stablecoins, meanwhile, Nabiullina said that Moscow and its allies were “still far from reaching concrete proposals” on issuance. Thus far this year, Russia has mulled the notion of launching a gold-pegged stablecoin with Iran.

Moscow is also investigating “common currency” options with fellow BRICS nations (Brazil, Russia, India, China, and South Africa).