Users of Russia’s central bank digital currency are going to pay a fee for each transaction, a high-ranking representative of the Bank of Russia recently announced. The digital ruble charge, however, does not currently exceed the applicable charges for fast payments in the country.
Bank of Russia will charge for the transfer of digital rubles
The Central Bank of Russia (CBR) plans to impose a fee on transactions with the digital ruble, said Kirill Pronin, director of the regulator’s financial technology division. The official stressed that these commissions would be less than the current charges for transfer to the banking sector.
Speaking at a forum under the banner “Russia’s Banking System: Ensuring the Availability of Services and Resources in the Face of Increasing Risk”, Pronin added that the fees must not exceed the cost of transfer with Russia’s fast payment system (FPS). Quoted by business news agency Prime, he said:
We assume that the transaction fee for the digital ruble will be lower than the existing wire transfer fee for market participants and certainly not higher than the commission within the FPS framework.
Russia launched its fast payment system in January 2019. It allows Russian residents to send money using only one phone number and pay for products and services via a QR code. Transfer up to 100,000 rubles per month (about $ 1,350) free. 0.5% fee for more transfers of this amount, but not more than 1,500 rubles (about $ 20).
The Central Bank of the Russian Federation Digital Currency (CBDC) is still under development with experts working on its specific format. The digital ruble will be implemented as a unique code, stored in a special electronic wallet, and is expected to become a full-fledged payment instrument alongside the regular ruble in its two other incarnations – cash and bank money.
The Bank of Russia started thinking about a digital ruble in 2018 and decided to explore the possibility of issuing CBDC last year. A consultation paper was published in October 2020 to collect feedback from financial sector players and other stakeholders. In April 2021, the authorities unveiled a digital ruble concept that outlines the original architecture.
In June, the Monetary Authority formed a pilot group with which more than a dozen banks joined. The CBR plans to complete the prototype of the platform in December 2021 and begin trials in January 2022. The bank’s chair Elvira Nabulina recently said that the digital ruble would provide Russian citizens with an alternative to cryptocurrency and fiat-backed stablecoins where cheaper and more reliable payments would be enabled. .
Do you think Russians would prefer to use the digital ruble platform than the existing method of money transfer? Tell us in the comments section below.
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