Gazprombank (GPB), the banking arm of Russia’s state-controlled gas giant Gazprom, is worried about the impact of the country’s proposed central bank digital currency (CBDC) on their bottom line. GPB told local news service RBC on Tuesday that they believe the introduction of the digital ruble should be done slowly and in stages to give the financial system time to adapt.
“Obviously, banks will have to somehow minimize their losses,” the bank said in a statement. “Therefore, it is very important to take into account these risks and move towards the launch of the digital ruble gradually in order to give the financial system enough time to adapt.”
Gazprombank is concerned that the rollout of the digital ruble, which would be issued directly by the Central Bank of Russia (CBR), could cause losses for the country’s commercial banks.
Their fears appear to be well-founded. Analysts from consulting company Yakov and Partners, formerly McKinsey Russia, estimate Russian banks could lose 50 billion rubles per year each after the launch of the digital ruble, with retailers set to save at least 80 billion rubles.
GPB said they believe that the lower commissions banks like GPB would receive once the CBDC goes into circulation will not result in lower prices for consumers, but only higher profits for retailers.
At the same time, GPB acknowledged that the introduction of the digital ruble would increase the transparency of all financial transactions, which would have a positive impact on the country’s banking system and on the economy as a whole. Gazprombank is one of 15 Russian banks participating in ongoing preliminary tests of the CBDC.
The past few months have seen several major developments for the digital ruble in Russia as it looks to modernize its financial system, speed up payments and get out in front of the growing popularity of Bitcoin and cryptocurrencies. Sanctions placed on Russia as a result of its invasion of Ukraine have quickened this process.
“The topic of digital financial assets, the digital ruble and cryptocurrencies is currently intensifying in society, as Western countries are imposing sanctions and creating problems for bank transfers, including in international settlements,” sad Anatoly Aksakov, head of the finance committee in Russia’s lower house of parliament.
Aksakov added that the introduction of digital currencies has allowed financial flows to bypass systems controlled by unfriendly countries. Back in April 2022, the International Monetary Fund warned that Russia could use the crypto ecosystem to get around the Western sanctions that have been imposed on the country since it invaded Ukraine in February, including using its embargoed energy sector to mine Bitcoin and raise revenues.
The next step in testing for the digital ruble will be to launch it for mutual settlements with China, which has already begun expanding the pilot test for its digital yuan, the e-CNY.
“If we launch this, then other countries will begin to actively use it going forward, and America’s control over the global financial system will effectively end,” said Aksakov.