From August 1, 2023, the Law on the Digital Ruble – Law No. 339-FZ of July 24, 2023 will come into effect. Let’s briefly consider some pros and cons of the digital ruble for the banking system. Technologies, risks and security will be considered in other articles.

Briefly about the digital ruble (digital ruble)

1. The digital ruble will operate together with the non-cash and cash form of the Russian ruble.

2. The Central Bank of Russia (Bank of Russia) will record digital ruble transactions on the Digital Ruble Platform (DRU).

3. To carry out operations, it will be necessary to open a PCR account, using a personal account at State Services and a simple electronic digital signature key.

4. Transparency of payments – all transactions will be recorded using blockchain technology, using a centralized PCR platform.

5. Import substitution — the possibility of working without SWIFT and international payment systems (Visa, Master Card, etc.)

6. Transfers and payments in digital rubles will be free for citizens, and tariffs for businesses for accepting payment in digital rubles will amount to 0.3% of the payment, the Bank of Russia said.

Some pros and cons

As we can see, the most affected will be the banking system, which will lose bank commissions for financial transfers.

For example, the bank commission for squaring for private individuals and legal entities is 0.4-2.5 percent. Therefore, many entrepreneurs offer discounts to customers when paying through the Fast Payment System (SBP), because transactions with SBP are more profitable for them.

We will remind that the SBP was developed and controlled by the Bank of Russia.

In addition, the growing popularity of the digital ruble will lead to a decrease in the profit of credit organizations from other banking instruments.

Competition in the financial markets will also increase. Players who offer new functions on existing banking applications for working with the digital ruble will win.

***
On July 12, 2023, the Bank of Russia published a draft regulation “On the Digital Ruble Platform.” The PCR operator will be the Bank of Russia. The regulation on PCR defines the types of digital wallets (CCP), the procedure for opening and closing the CCP, and a list of transactions with digital rubles are given.

Thus, the digital currency poses new challenges to the banking system.

Time will tell how fintechs will cope with them.

This is just a preliminary, top-level, vertical view of the Digital Ruble Law.

Life is diverse.

The Russian man is resourceful.

If Lyovsha was able to shoe some English flea, then modern Kulibins will be able to shoe a digital flea as well, in the direction they need.