Testing of Digital Ruble Begins in Russia
The Russian banks MTS and PSB have started testing the digital ruble, allowing “entrepreneurs” to use the CBDC for payments. The Central Bank of Russia is expediting its CBDC project and aims to roll out the digital ruble nationwide between 2025 and 2027. MTS, along with VTB Bank, has conducted real-world transactions with the digital ruble following advanced pilots. Igor Chuchkin, MTS’s payment technology chief, expressed delight in participating in the digital ruble pilot and plans to explore additional offerings based on their experiences during the pilot. Meanwhile, PSB enabled a client to open a digital wallet and successfully make a payment for services using a QR code generated by the bank’s app.
Main Points:
- Russian banks MTS and PSB have started testing the digital ruble.
- The Central Bank of Russia aims to roll out the digital ruble nationally by 2025-2027.
- MTS and VTB Bank have conducted real-world transactions with the digital ruble after advanced pilots.
- PSB enabled a client to make a payment for services using a QR code generated by its app.
- Transaction fees for digital ruble payments are set at 0.3%, with P2P transactions being free of charge.
Other Banks and Opposition to CBDC
Eleven other Russian banks are also testing the CBDC with select clients in various cities. The Central Bank has stated that 16 other banks, including regional banks, are ready to join the pilot quickly. However, not all major banks in Russia are in favor of the CBDC. The country’s largest banking association has urged the Central Bank to slow down the pilot. Additionally, Sberbank and Tinkoff, two of Russia’s “megabanks,” withdrew from the pilot at the last minute. It remains uncertain if they will join later or wait until legally obliged to process CBDC transactions. Experts have previously estimated that commercial banks could lose $684 million annually if the Central Bank launches a CBDC.
Hot Take:
The testing of the digital ruble by Russian banks marks a significant step in the country’s CBDC project. The successful real-world transactions with the digital ruble indicate its potential for widespread use in the future. However, opposition from major banks and concerns over potential financial losses highlight the challenges and complexities associated with implementing a CBDC. It will be interesting to see how the pilot progresses and if all banks eventually embrace the digital ruble.
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