Digital ruble rollout plans could cost the Russian banking sector a total of $536 million per year, financial analysts have claimed.
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.
Digital Ruble Rollout Plans in Motion
The Central Bank Governor Elvira Nabiullina last week confirmed that the digital ruble will roll out “no earlier” than 2025.
This comes after the Finance Ministry suggested that “all” Russians would have the chance to use the CBDC at some point this year.
A Russian bank ATM. (Source: Valera N. Trubin [CC BY-SA 3.0])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.
And within three to five years of “full-scale” adoption efforts, banks could start feeling the losses.
‘Retailers Will Be the Big Digital RUB Winners’
Yakov and Partners said 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.”
Many will be hesitant to use the coin due to the fact that Russian CBDC wallets will not allow holders to accrue interest on their tokens.
A further blow could come in the form of cashback incentives. The experts opined that “banks will stop” offering cashback services “if their income falls.”
Yakov and Partners also opined that “the digital ruble has no obvious advantages in terms of ease of everyday use.”
A rollout is equally unlikely to affect prices, and would only lead to boosts in “profits for retailers.”
Banks to Go on Defensive?
The firm further added that Russian banks “can choose from two options” when it comes to safeguarding their interests.
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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.”
But, Yakov and Partners stated, that if the result is a stand-off between the commercial banking sector and the Central Bank, neither party would win.
Instead, “the implementation of the digital ruble will be delayed, and banks will suffer losses relatively slowly.”
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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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