The Russian banks MTS and PSB are testing the application of the digital ruble. The country’s Central Bank has accelerated its CBDC (Central Bank Digital Currency) project aiming for a national rollout between 2025 to 2027. Early adopters comprised of customers and employees of these banks have reportedly conducted transactions using the novel digital coin.
The payment technology chief of MTS, Igor Chuchkin, voiced his excitement at being one of the pioneers of digital ruble use. He expressed his intention to explore how the digital ruble can expand their service offerings based on experiences from the initial pilot stage.
In a real-world application, PSB created a digital wallet for its client who works in the online education sector. The client was able to carry out transactions for services using a QR code generated by an app. It was also noted that the client could efficiently convert the digital ruble to conventional rubles and vice versa through the PSB mobile app. A highlight of these transactions was a successful B2C (business-to-customer) transaction using digital ruble.
The Central Bank has capped transaction fees for the digital ruble at 0.3%, but peer-to-peer transactions are free. However, it’s not all rosy; skepticism still shrouds the rapid implementation of the digital ruble.
There’s a mixed atmosphere in Russia’s banking sector regarding the new CBDC project; while around 11 banks are involved in the trials with selective customers, two of Russia’s largest banks, Sberbank and Tinkoff, opted out at the last minute and it’s still uncertain whether they would join at a later stage or only comply with inevitable legal requirements to process CBDC transactions.
The country’s leading banking association has urged the Central Bank to decelerate the pace of the pilot. The apprehension stems from a report earlier this year that predicted commercial banks could potentially lose up to $684 million annually if a CBDC was launched.
Whether the adoption of CBDC will be a success or the cause of massive loss remains uncertain; only time will tell. While it shows potential, the novel digital ruble is undeniably a doubled-edged sword.