As Russia moves closer to launching a digital ruble, the country’s commercial banks have raised concerns about its usage, costs of implementation, and their role in the ecosystem. The banks say many clients view the upcoming central bank digital currency (CBDC) as a scam.
Russia passed CBDC legislation in mid-July, with President Vladimir Putin signing it into law two weeks ago. The Bank of Russia also recently claimed the CBDC would be voluntary and that the government would not force it on its citizens.
However, as the local newspaper Kommersant reports, Russian banks are not taking the central bank at its word.
In a letter to the central bank, the Association of Russian Banks called for formal laws banning the government from forcing them, or their clients, to accept the digital ruble.
The letter, and the association’s entire website, have since been taken down.
Russian banks are also concerned about the costs of implementing the digital ruble. They want the central bank to reveal if there’s a compensation model to reward them for offering digital ruble intermediary services. Additionally, they want the Bank of Russia prohibited from increasing CBDC tariffs or unilaterally changing the contract terms.
“Banks will have to monitor compliance with [CBDC] legislation when making transactions with the digital ruble, but it is not clear how banks will be compensated for such costs if the transactions of individuals are carried out without a commission,” says Igor Dubov, a partner at Russian law firm Iontsev, Lyakhovsky and Partners.
In its response, the Bank of Russia said it would consider the issues raised by the banks.
Legal experts believe that the vague and overly-broad nature of CBDC legislation in Russia gives the government and the central bank massive leeway to change the future terms at the users’ expense.
Russians are wary of the digital ruble, studies find
As the central bank grapples with the testing, development, and launching of the digital ruble, a critical question has emerged—do Russians want the CBDC?
Some surveys suggest that the upcoming digital currency might struggle to get users. Local newspaper Vedomosti’s recent survey found that 30% of Russians have not heard of the CBDC. Some 55% of the respondents said they’d heard of it but didn’t know much about it, with only 15% saying they were aware of the details and the upcoming launch.
Vedomosti further found that over 50% of the respondents struggled to find a need for the CBDC, with the number being higher among those who did not complete their education.
Another study by BankInform, a Russian price comparison site, corroborated the findings. The study found that only 13% of Russians said they would use the digital ruble once it launches. A third of the respondents thought it might be a scam.
In its letter to the central bank, the Association of Russian Banks also alluded to the mistrust in the digital currency.
“…in society, there is an extremely wary attitude towards the introduction of the digital ruble on the part of citizens,” the ARB said.
Despite the rising adoption of digital payments, CBDCs have struggled in some countries. In Nigeria, the eNaira has seen little activity since its October 2021 launch, despite the country recording billions of dollars in monthly digital asset trading volume.
Nevertheless, the Bank of Russia is pushing forward on the CBDC project. On Wednesday, it announced that real-world digital ruble transactions would commence next week, with 13 banks participating in the trial.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: How CBDCs on Bitcoin should work
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