Financial analysts predict that the rollout of the digital ruble in Russia could cost the banking sector around $536 million per year, with the retail sector expected to see a significant increase in profits. The Central Bank Governor has confirmed that the digital ruble will not be implemented before 2025, with the Finance Ministry suggesting that all Russians will have access to the CBDC by the end of the year. Experts believe that the digital ruble will carve out a niche in the domestic retail payments market and may start to take market share away from traditional bank card payments in the coming years.
According to analysts from Yakov and Partners, Russian retail firms are likely to benefit from the adoption of the digital ruble as it will eliminate interbank commission fees and provide instant transaction processing. However, consumers may be less inclined to use the CBDC due to restrictions on interest accrual in digital ruble wallets and potential reductions in cashback incentives offered by banks. The experts also noted that the digital ruble may not offer significant advantages in terms of everyday use and is unlikely to impact prices, but would lead to increased profits for retailers.
Yakov and Partners outlined two possible strategies for Russian banks to respond to the digital ruble rollout in order to safeguard their interests. The defensive approach would involve competing with the digital ruble by offering higher interest payments or better cashback deals to customers. On the other hand, the proactive approach would entail actively promoting products that utilize the digital ruble in order to generate revenue. However, the analysts warned that a standoff between the commercial banking sector and the Central Bank could delay the implementation of the digital ruble and result in losses for banks over time.
The Central Bank’s acceleration of the CBDC rollout in response to international sanctions has raised concerns among Russian banks, despite their participation in pilot programs. Moscow is aiming to encourage international trading partners to switch from USD-powered trade to digital ruble and other CBDCs. The digital ruble adoption process is expected to take between five and seven years, with banks expressing skepticism about the CBDC’s potential impact. The implementation of the digital ruble could lead to significant changes in the Russian financial sector and retail market, with both challenges and opportunities for banks and businesses to navigate.
