Russian Finance Ministry sees potential for stronger ruble with digital ruble launch

The launch of the digital ruble is associated with risks for banks, but could bolster the competitiveness of the Russian currency, said Ivan Chebeskov, head of the Financial Policy Department at the Russian Finance Ministry, according to РИА Новости.

The Finance Ministry expects that the introduction of the digital ruble will enhance the competitiveness of the Russian currency in international settlements.

“If we make the digital ruble more attractive relative to other digital currencies, give non-residents, say, our partners, easier access and the ability to receive digital rubles, then perhaps we can thereby raise the ruble’s competitiveness in international settlements overall,” Chebeskov said.

He also noted that the new asset could “open an ocean of opportunities” for fintech, improving efficiency, system transparency, the budgeting process, and the control of targeted spending.

At the same time, the Finance Ministry is concerned about the potential drop in banks’ income due to the introduction of the digital ruble.

Among the risks for banks, Chebeskov listed the loss of part of retail transaction deposits, some of the acquiring-related commission income, and an increase in the cost of liabilities.

“If people, citizens, gain access to a more convenient and cheaper settlement mechanism, this could, of course, trigger a shift from current account balances to digital rubles,” the official said.

The Bank of Russia allowed a rise in rates after the rollout of the digital ruble.

In turn, Deputy Chairman of the Bank of Russia Alexei Zabotkin stated that none of the banks voiced opposition to issuing the new asset.

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