Bank of Russia: Digital rouble will reduce bank profits and help companies

The Russian central bank wants to use the digital rouble to help companies by making financial intermediaries superfluous.

Russia’s digital rouble is expected to lower business costs, but could also reduce the profits of commercial banks, says Elvira Nabiullina, the chairwoman of the Bank of Russia.

At a meeting of „Opora Russia“, a non-governmental organisation of small and medium-sized enterprises, Nabiullina said on 3 December that a digital rouble could reduce the profits by One Bitcoin a Day of commercial banks through commissions and transaction fees.

She also said that a digital central bank currency was a natural development for rationalising financial services:

„This is a natural step in the development of the financial system: financial intermediaries should put a burden on the economy and make money with new products and services instead of benefiting from their monopoly and the lack of alternatives. We believe that small and medium-sized enterprises should definitely benefit“.

She also mentioned a number of advantages of a digital rouble

These include, for example, more secure and faster payments. „We are now thinking about several models where the digital rouble can exist, where the interaction between customers, the central bank and commercial banks is organised in different ways, but these benefits remain in all models. These are fast, reliable and secure payments,“ she said.

In October 2020, Nabiullina claimed that a digital rouble could not provide the same level of anonymity as cash. However, she said the Bank of Russia wanted to strengthen the privacy of users. Shortly before, Russia’s central bank had officially published its CBDC plans on 13 October. According to the bank, a digital rouble could soon be used as an additional form of money besides cash.