With the passing of Russian laws supporting a digital ruble, banks have many questions about the central bank digital currency (CBDC). The Association of Russian Banks (ARB) reportedly sent a letter of queries to the central bank. Its website subsequently went offline. Plus, two separate consumer surveys found limited awareness about the CBDC, with some suspecting it is a scam.
Banks have digital ruble concerns
Kommersant reported the letter two days ago and the news has been carried by many other Russian websites. However, the link to the letter and the Association’s entire website are currently unavailable.
The letter states that “in society there is an extremely wary attitude towards the introduction of the digital ruble.” Hence banks are concerned about making it compulsory for citizens to open a digital ruble account. The central bank had previously stated it was optional but bankers want that legislated.
Most of all, the banks are wary about costs. They want to know whether they will be compensated for acting as intermediaries. And they are concerned about potential increases in tariffs from the operator of the digital ruble platform – the central bank. They also want to prevent the platform operator from unilaterally changing the contract terms.
There’s a request for legal clarification about whether the digital ruble is a non-cash currency or a third form of money as it is treated inconsistently in various legislation.
One fund manager outlined some practical questions to media outlet BFM. Given the digital ruble cannot be used for investment or deposits, he wondered whether balances could be burned after a period of inactivity. He also wanted to know whether the police, the regulators and the central bank could block the digital rubles. On that latter point, in an early CBDC paper, the Bank of Russia made clear that was its intent.
Consumers are confused and wary
Two media outlets conducted digital ruble surveys. The larger Vedomosti had a third party polling organization survey 1,600 Russians. Just 15% said they knew of plans to introduce the CBDC in 2025. Fifty-five percent were aware of the concept but didn’t know the details. And the remaining 30% heard about it for the first time from the pollster.
Around half of the people struggled to answer why a digital ruble is needed. That figure was far higher for those that did not complete high school (75%). Older users were more aware of the use cases.
Price comparison site BankInform surveyed its subscribers finding that only 13% would use the digital ruble. Just over a third are curious but don’t want to use it. And another 21% are not interested. Almost a third of respondents thought it might be a scam.
Meanwhile, the passing of the CBDC laws marks the start of the digital ruble pilots involving at least 13 banks. The CBDC laws allow foreigners to hold the digital ruble and Russia is also exploring the potential CBDC use cases for cross border payments. Later this month there’s a BRICS convention in South Africa during which a common digital currency is expected to be discussed.