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

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Author Profile

Share

Copied

Last updated: 

June 26, 2023

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

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).