Gazprombank, a subsidiary of the main Russian government-owned gas company Gazprom, has publicly proposed giving banks more time before implementing the digital ruble. The country’s central bank digital currency (CBDC) project has accelerated due to global financial sanctions amid geopolitical tensions.
As local media reported on February 7, Gazprombank, one of the 15 banks participating in the CBDC pilot program, issued a public statement suggesting to proceed with caution regarding the interests of traditional banks:
“It is imperative that banks take steps to mitigate potential losses. Therefore, it is crucial to recognize the potential risks associated with the transition to a digital ruble and to approach its implementation cautiously, allowing the financial system sufficient time to adapt.”
However, the statement admits that the CBDC will help increase transparency throughout Russia’s financial system and economy.
McKinsey’s Russian branch estimated potential losses for traditional banks from CBDC implementation at around $3.5 billion (250 billion rubles) over five years. At the same time, the consultancy estimated retailer profits at $1.1 billion annually.
Related: Iran and Russia want to issue a new gold-backed stablecoin
Work on a CBDC in 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 latest monetary policy update from the Bank of Russia, the authority will start connecting all banks and credit institutions to the digital ruble platform in 2024.
The Central Bank of Russia has also started to develop a cross-border settlement system using a CBDC. The country has faced increasing financial and trade sanctions since the escalation of the Russo-Ukrainian war when it launched a full-scale invasion of Ukraine in late February 2022.
This post Russia’s Gazprombank recommends a slow launch of CBDCs for fear of lost revenue
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