Banking News

Russian mobile firms Megafon, Beeline keen to host digital ruble CBDC wallets

digital currency ruble

Russian cellular network operators are looking to create online wallets for the central bank’s digital currency (CBDC), Izvestia newspaper reported on Tuesday.

Most central banks around the world are exploring distributing their future CBDCs through commercial banks. But mobile networks Megafon (75 million subscribers) and Beeline (55 million users) told Izvestia that they’re interested in providing online wallets for a possible digital ruble.

Beeline is looking into “maintaining wallets on smart devices, which is not provided for the current version of the (CBDC) concept, as well as the possibility of performing P2P payment transactions without the participation of financial intermediaries, including offline,” said the representative.

Whether it’s banks or mobile operators that host the wallets, a vital issue with CBDC is the ability to use the currency offline. That cash-like ability is a little challenging and was raised in a report from Sweden’s Riksbank yesterday.

Beeline’s parent Veon highlighted its mobile financial services activities in its 2019 annual report. At that stage, it said it had 7.4 million digital wallets with a roughly 11% market penetration. If telecoms firms aren’t included in CBDC plans, that might dent their ambitions in financial services.

It’s not the first time mobile firms have expressed an interest in managing digital wallets. KT, South Korea’s second-largest mobile phone provider, has exceeded its own targets by supporting more than $2 billion local digital currency issuance last year.

In late 2020, Huawei announced its HuaweiMate 40 phones would support China’s CBDC, providing an in-built hardware wallet. More recently, it acquired a payments license.