Gazprombank, a subsidiary of Russia’s leading state-owned gas company, Gazprom, has publicly suggested giving banks more time before implementing a digital ruble. The country’s central bank digital currency (CBDC) project has accelerated due to global financial sanctions amid geopolitical tensions.
As reported by local media on February 3. 7, Gazprombank, one of the 15 banks participating in the CBDC trial, issued a public statement with a proposal to proceed with caution regarding the interests of traditional banks:
“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, giving the financial system enough time to adapt.”
However, the statement acknowledges that CBDCs will help increase transparency across the Russian financial system and economy.
The Russian branch of McKinsey estimated the potential losses of conventional banks from implementing CBDCs at about $3.5 billion (250 billion rubles) within five years. At the same time, the consulting company estimated the profits of retailers at $ 1.1 billion annually.
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Work on a digital currency for the Central Bank of Russia began in 2020. The digital ruble is currently being tested for settlement with banks and is expected to be completed this year. According to the recent monetary policy update of the Bank of Russia, the authority will start connecting all banks and credit institutions to the digital ruble platform in 2024.
The Russian Central Bank has also started developing a cross-border settlement system using a central bank digital currency. The country has faced mounting financial and trade sanctions since the escalation of the Russo-Ukraine War when it launched a full-scale invasion of Ukraine in late February 2022.