Russian Central Bank Mentions Fees on Digital Ruble Transactions

According to a recent announcement by a high-ranking official of the Bank of Russia, users of its central bank digital currency (CBDC) would be required to pay a fee for every transaction. However, he disclosed that the charge for the digital ruble would not be higher than what is currently applicable to fee payments in Russia. The director of the Financial Technologies Department of the Central Bank of Russia (CBR), Kirill Pronin revealed that the regulator has plans of imposing fees on transactions that will be conducted with the digital ruble. He did emphasize that these charges would be significantly lower than what people currently have to pay in fee for making bank transfers.

Pronin spoke at a forum and noted that the cost of the transactions associated with digital ruble would not exceed the transfer costs associated with the Faster Payments System (FPS) in Russia. He spoke under the banner of ‘Banking System of Russia: Ensuring Availability of Services and Resources in the Face of Increasing Risks’. Prime, the business news agency, quoted the director, who said that the fees imposed on transactions made with the digital ruble would be less than the existing fees associated with wire transfers. 

He added that market participants do not need to worry because the fees would not be higher than the commissions that are part of the FPS framework. The Faster Payment System was launched by Russia back in 2019. Russian residents were able to use this system for sending money just through a phone number. They were also given the ability to use just a QR code to pay for goods and services. People can make transfers of about 100,000 rubles every month, which is around $1,350, without having to pay any fee. Transfers that exceed that amount have a 0.5% fee applicable, but this is not higher than 1,500 rubles, or $20. 

The central bank digital currency (CBDC) of the Russian Federation is still under development, as the experts are currently working on coming up with a precise format. According to expectations, the digital ruble will be introduced as a unique code that will be stored in a special electronic wallet. Moreover, it would become a full-fledged payment instrument with its counterpart the regular ruble in its two forms i.e. bank money and cash. It was back in 2018 that the Bank of Russia had begun to take an interest in developing a digital ruble. 

However, it wasn’t until last year that they had seriously begun to look into the possibility of developing a central bank digital currency (CBDC). In October 2020, they published a consultation paper for gathering feedback from the participants in the financial sector, along with other stakeholders. A digital ruble concept was released by the authority in April 2021 that outlined the principal architecture of the CBDC. A pilot group was formed by the monetary authority in June that comprised of a dozen banks. Now, CBR is planning on completing a prototype for the platform in December 2021.