Russian experts believe that the government will utilize the digital ruble to pay state benefits and evade sanctions. With the pilot launch of the digital ruble just days away, experts have been analyzing the limited information available thus far.
While the initial pilot tests will focus on micropayments, wallet top-up functionality, and direct debiting features, experts predict that the Central Bank has more ambitious plans for the digital ruble.
According to Pavel Kashitsyn, an executive at Expert RA, Russia’s oldest credit rating agency, it is estimated that it will take about three years before the majority of citizens can perform a significant amount of their financial activities with the CBDC. However, Yegor Krivosheya, the head of blockchain and fintech firm Skolkovo, expressed confidence that the digital ruble will be used for government payments.
The Central Bank of Russia is set to launch its pilot on August 15, with 600 citizens becoming the first to use the CBDC. The pilot will involve partnerships with retailers in 11 cities nationwide, including Moscow’s iconic metro system. Initially, 30 retailers and 13 banks will participate in the trials, with a second group of about 16 banks joining in the coming months.
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Experts suggest that the digital ruble could be useful in various sectors. Krivosheya believes that government organs will likely use the coin to pay contractors in tender agreements and citizens’ benefits such as state pensions. In the business world, the CBDC could be valuable in the project financing market, enabling parties to maintain control over the use of funds. It could also facilitate cross-border transactions, as suggested by senior Moscow lawmakers, potentially allowing Russia and Belarus to make and receive payments with their closest political allies.
The need for a cross-border CBDC has become more urgent due to sanctions and limited access to the SWIFT banking network, according to financial experts.
Russia’s plans for the digital ruble bear similarities to China’s digital yuan adoption plans, which also began with pilot operations in several cities before expanding gradually.
However, the Russian Central Bank may face challenges along the way. Business chiefs and banks in Russia have raised concerns about the digital ruble. Additionally, the decision by Sberbank, one of Russia’s largest financial and IT firms, to drop out of the pilot has puzzled experts. Both Sberbank and Tinkoff Bank were initially scheduled to participate in the first phase of the pilot but withdrew for unknown reasons.
It remains unknown whether Sberbank will introduce support for the digital ruble in the near future or if it will ignore the payment method until it becomes legally required to provide support.
In conclusion, experts believe that the digital ruble will be utilized for government payments, project financing, and cross-border transactions. However, challenges and uncertainties surrounding the pilot launch and the involvement of major financial institutions like Sberbank may impact the adoption and implementation of the digital ruble.
