Analysis of Digital Ruble Rollout Plans and Potential Impact on Russian Banking Sector
Digital Ruble Rollout Plans in Motion
Per Forbes Russia, the nation’s retail sector could be in for a windfall if CBDC adoption plans go ahead as planned. Experts said the retail market could expect to see annual profits rise to the tune of $857 million once the CBDC becomes widespread.
Analysts from Yakov and Partners (formerly partners with McKinsey in Russia) said the digital ruble was on track to “occupy a niche in the domestic retail payments market.” The experts said that the token would “partially take away” market share from bank card payments. Within three to five years of “full-scale” adoption efforts, banks could start feeling the losses.
Retailers Will Be the Big Digital RUB Winners
Russian retail firms would likely embrace the coin, which will do away with interbank commission fees. CBDC transactions are also instantaneous, unlike bank card payments, which can take several days to process. However, Yakov and Partners added that for consumers, the “benefits” of the CBDC “are less clear-cut.”
Banks to Go on Defensive?
The firm further added that Russian banks “can choose from two options” when it comes to safeguarding their interests. The first would be “defensive,” and could see banks try to muscle out the digital RUB. They could look to do so with offers of higher interest payments or better cashback deals. A second more proactive option could involve banks actively promoting “products that use the digital ruble and try to earn money from them.”
Conclusion
The Central Bank began accelerating its CBDC rollout in 2023 as part of a response to US and EU-led sanctions packages. Moscow hopes it can convince international trading partners to ditch USD-powered trade in favor of the digital ruble and other CBDCs. Nabiullina, meanwhile, stated that the full digital ruble rollout and adoption process would likely take between five and seven years. Russian banks have already expressed skepticism about the CBDC, although most major players are taking part in pilots.
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