Banks Face Significant Costs to Launch Digital Ruble

Commercial banks will need to invest between 120 million and over 200 million rubles to connect to the national digital currency platform, according to experts interviewed by Kommersant.

This includes “costs for infrastructure, ensuring information security, application software, and integration work with existing internal banking systems. As the number of connected clients and transactions grows, additional investments will be required for infrastructure development and license procurement.” 

“Even for a medium-sized bank, the investment in hardware will be at least 40 million rubles, and in software — at least 80 million rubles,” one of the publication’s sources estimated.

There is also a need to account for expenses on highly qualified personnel both during the implementation phase and in the ongoing operational support.

Experts believe that these amounts are prohibitive for smaller banks, as they exceed their annual IT infrastructure budgets several times over. Even medium-sized banks will find it challenging to profit from these investments. 

Market participants suggest that cloud technologies and off-the-shelf solutions could reduce entry costs.

According to the plans of the Central Bank of Russia, 13 commercial banks, which are systemically important credit institutions, must offer clients the ability to operate with the digital ruble by July 1, 2025.

The regulator is confident that the proposed timeline is sufficient for connection, as “initially, it involves the largest banks, which are the most technologically advanced in the market, and some are already connected to the platform and piloting digital ruble operations.”

In October 2023, financial institutions were already calculating the costs of implementing the technology. Rosbank estimated its expenses over two years at 150 million rubles.

The law on the national digital currency came into effect on August 1, 2023. The Central Bank of Russia has set requirements for banks regarding the information security of digital ruble operations and established tariffs for them.

Testing of the CBDC for individuals and legal entities in Russia began on August 15. The list of participants will expand to include dozens of new banks by the end of 2024. However, the majority of Russians are uninterested in using the tool, according to a survey.