🌎 High Costs Hinder Small Russian Banks from Digital Ruble Integration

Experts Warn of High Entry Costs for Small Russian Banks to Join Digital Ruble Platform

Experts caution that the substantial investment required to join the digital ruble platform could be prohibitive for small Russian banks, as it significantly exceeds their annual technology budgets.

The cost for Russian banks to integrate with the Bank of Russia’s central bank digital currency (CBDC) platform is reportedly very high for smaller institutions. According to local industry participants, the expense of upgrading systems, including automated banking and compliance software, ranges from ₽120 million to over ₽200 million rubles (approximately $1.3 million to $2.2 million). This amount surpasses the annual tech budgets of many small banks.

One source familiar with the matter highlighted the complexity, stating that “their digital banking systems often come from multiple providers, complicating integration.”

Bank of Russia’s Digital Ruble Rollout Plan

The Bank of Russia aims to implement digital ruble services across all banks by 2027, beginning with systemically important institutions in 2025. The regulator believes this timeline will give banks sufficient time to integrate the digital ruble. Several large banks are already piloting operations.

Progress and Pilot Programs

In early September, it was reported that Russia’s banking giant Sberbank plans to start offering digital ruble services to its customers by early 2025. The Bank of Russia first introduced the digital ruble prototype in December 2021, with testing commencing in 2022. By August 2023, clients and employees from 13 Russian banks were participating in pilot transactions.

In September, the central bank expanded the pilot program to include up to 9,000 individuals and 1,200 companies, a significant increase from the initial 600 individuals and 22 companies involved.

Future Availability and Complementary Role

In late July, Russia’s central bank indicated that the digital ruble could be available for broader use by July 2025. The central bank assured that the digital ruble would complement, rather than replace, existing forms of cash and non-cash rubles.

China, which serves as a key reference for Russia’s digital currency initiatives, has already begun paying state salaries in Changshu using its own CBDC, the digital yuan, to promote the adoption of the state-controlled currency.