Russia’s largest lender Sberbank joins CBDC pilot

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Russia’s largest lender, Sberbank, is among the new participants in the second pilot for the country’s central bank digital currency (CBDC), the digital ruble.

The Bank of Russia (BOR) launched the first CBDC pilot in August 2023 after passing a legal framework that paved the way for a digital version of its ruble. It involved 13 commercial banks in 13 cities, but the country’s biggest bank wasn’t among them. The exclusion was curious, especially since BOR is the majority stakeholder of Sberbank with over 60% ownership.

The central bank has now included Sberbank in the second round of the pilot program. In an announcement on its website, the regulator also revealed that Russia’s largest digital bank, TBank, and its top rival, Tochka Bank, would be the other first-time participants. They join Sovcom Bank, Sinara Bank, TKB Bank, and other titans in the pilot. In total, 22 lenders will participate.

Sberbank’s inclusion is critical for the BOR’s mission to push retail adoption of the digital ruble. The bank dominates the sector, accounting for nearly 70% of retail deposits. 

The second pilot comes amid an accelerated push by the central bank to launch the digital ruble this year. Despite opposition from retailers and commercial banks, BOR has remained adamant that the official launch date is July this year for the major banks. The smaller players are expected to support digital ruble payments by July 2027. Large retailers will also be expected to support the CBDC in July this year, with the smaller ones getting two more years to prepare.

The timeline and manner of implementation have come under criticism from lenders, with the Association of Russian Banks (ABR) decrying the high cost of implementation, which chairman Anatoly Kozlachkov claimed could hit $1 million for each bank.

The banks also worry that the CBDC could cause a massive dent in retail deposits as they would now compete directly with the central bank. This concern is universal, but unlike in other jurisdictions where holding caps have been proposed as a solution, Russian lawmakers believe this would be a welcome change. 

Retailers have also opposed the steep timeline, successfully petitioning the Ministry of Trade and Industry to air their grievances. The ministry called on lawmakers to push back the implementation as the costs are prohibitive, and there isn’t enough time to stress-test the systems. The Association of Retail Companies also raised concerns, calling for a two-year transition period for all retailers.

Watch: Finding ways to use CBDC outside of digital currencies