In the evolving space of digital currencies, the Central Bank of Russia has taken a pioneering step. The bank recently launched a pilot to test the digital ruble – its own version of a central bank digital currency (CBDC). However, Anastasia Tselykh, a special correspondent at RTVI, has reignited the discourse on the CBDC by questioning whether it would bring any tangible benefits for ordinary citizens.
In her column, Tselykh termed the digital ruble as the “first step toward a digital gulag”, insinuating that the digital currency would primarily benefit the central bank by facilitating seamless tracking of citizens’ money without the need to rely on other financial organizations.
Reasoning from the Chinese experience, where a digital yuan has been in pilot since 2015, Tselykh argues that the digital ruble could eventually become a standard form of salary payment for large companies and state employees. Yet she remains skeptical about any assurances from the Central Bank Governor, Elvira Nabiullina, that usage of digital ruble will not be enforced.
On a brighter note, Tselykh acknowledged the potential benefits of the digital ruble. The mooted offline payment capability could be one, contingent on the development of the technical ability to facilitate it. The Central Bank’s idea of prepaid hard wallet-type cards or devices which can be topped up with CBDC funds could indeed prove to be a game-changer. These could enable electronic payments in areas devoid of network coverage or internet connection, a pressing issue in remote Russian regions.
Despite these potential benefits, Tselykh remains unsure about the digital ruble’s efficacy in cross-border payments and as a tool to evade international sanctions. The central bank’s assertions about both these potential benefits were met with scepticism by Tselykh, citing that international transactions with CBDCs would still involve foreign financial organizations. Consequently, international regulators could trace these transactions, negating any sanctions evasion potential.
These are just the tip of the iceberg of potential concerns. Key domestic banks, like Sberbank and Tinkoff Bank, have pulled out of the pilot. Business leaders and other banks have also expressed doubts about the feasibility of the digital ruble. Meanwhile, surveys suggest a wider public disinterest in adopting the coin.
In conclusion, Tselykh’s scepticism echoes a larger sentiment of uncertainty surrounding digital currencies in general. Until the benefits of the digital ruble are clear and the technical aspects are well-developed, the future remains nebulous. However, as with any technological innovation, the rush to be part of the trend is inevitable, emphasizing the importance for both regulators and stakeholders to understand the implications fully.