Russia’s Gazprombank recommends slow CBDC rollout fearing loss of income

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Gazprom­bank, a sub­sidiary of the lead­ing Russ­ian gov­ern­ment-owned gas com­pa­ny, Gazprom, pub­licly pro­posed giv­ing banks more time before imple­ment­ing the dig­i­tal ruble. The country’s cen­tral bank dig­i­tal cur­ren­cy (CBDC) project has been accel­er­at­ing due to glob­al finan­cial sanc­tions amid geopo­lit­i­cal tensions. 

As report­ed by local media on Feb. 7, Gazprom­bank, one of the 15 banks par­tic­i­pat­ing in the CBDC pilot, issued a pub­lic state­ment with a sug­ges­tion to pro­ceed with cau­tion regard­ing tra­di­tion­al banks’ interests: 

“It is imper­a­tive that banks take mea­sures to mit­i­gate poten­tial loss­es. Hence, it is cru­cial to rec­og­nize the poten­tial risks asso­ci­at­ed with the tran­si­tion to a dig­i­tal ruble and approach its imple­men­ta­tion with cau­tion, allow­ing the finan­cial sys­tem suf­fi­cient time to adjust.“

How­ev­er, the state­ment admits that the CBDC will help raise trans­paren­cy across the Russ­ian finan­cial sys­tem and economy.

The Russ­ian branch of McK­in­sey esti­mat­ed the poten­tial loss­es of tra­di­tion­al banks from the CBDC imple­men­ta­tion at around $3.5 bil­lion (250 bil­lion rubles) in five years. At the same time, the con­sul­tan­cy firm esti­mat­ed the retail­ers’ prof­it at $1.1 bil­lion yearly. 

Relat­ed: Iran and Rus­sia want to issue new sta­ble­coin backed by gold

The work on a CBDC in Rus­sia start­ed back in 2020. The dig­i­tal rou­ble is cur­rent­ly being test­ed for set­tling with the banks and is expect­ed to be com­plet­ed this year. Accord­ing to the Bank of Russia’s lat­est mon­e­tary pol­i­cy update, the author­i­ty will begin to con­nect all banks and cred­it insti­tu­tions to the dig­i­tal rou­ble plat­form in 2024.

The Cen­tral Bank of Rus­sia has also begun devel­op­ing a cross-bor­der set­tle­ment sys­tem using a CBDC. The coun­try faced mount­ing finan­cial and trade sanc­tions since the esca­la­tion of the Rus­so-Ukrain­ian war when it launched a full-scale inva­sion of Ukraine in late Feb­ru­ary 2022.

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