In October the Bank of Russia revealed a time frame for the roll out of the digital ruble, which forms part of a Bill that has been submitted to the State Duma. The mass rollout date is 1 July 2025. By that time the largest banks and retailers must support the central bank digital currency (CBDC). Now the Ministry of Industry and Trade has asked for a longer timescale of up to two years, similar to that provided to smaller retailers, the Izvestia newspaper reported.
The 1 July deadline applies to retailers with a turnover of more than 30 million rubles ($274,000). Those with incomes between 20 to 30 million rubles have one extra year, and smaller firms have two years.
The Ministry complained that there are still no rules for the operation and functioning of the digital ruble, so it doesn’t allow sufficient time for retailers to prepare and for adapting their point of sale software.
Trade bodies agree. “We believe it is necessary to refrain from legislatively establishing specific deadlines for launching systems at the trade level and to provide for a transition period of at least two years, during which companies will carry out the necessary work,” a letter from the Retail Companies Association (ACORT) states.
Another industry body, the Association of Internet Trade Companies (AITC), has similar views. It said, “The absence of such important provisions does not give businesses the opportunity to assess the costs of implementation time, the necessary human resources, expenses for the company, and also to understand to what extent companies are ready to implement such payments.”
The main benefit of a CBDC for retail outlets is reduced acquiring fees, so retailers will pay less for processing payments.
What’s the rush?
Stepping back, one of the big motivators for a CBDC is for cross border payments in order to circumvent sanctions. If a CBDC isn’t rolled out domestically, then a cross border CBDC would need direct integration with the domestic payment system.
With the cross border payment platform mBridge, the only member that currently has a domestic CBDC is China, and even that is in pilot mode. Hence, it’s not completely clear why there’s such a rush in Russia. Especially given the central bank has a few other issues to deal with given the war with Ukraine.
On the other hand, Russia is known for its software prowess, and is trying to lead the BRICS Bridge cross border payment project. Hence, having an operational domestic CBDC gives it more credibility.
