According to several local financial institutions, Russia’s central bank digital currency, or CBDC, could contain a number of risks related to cybersecurity and fraud. The Association of Russian Banks, or ARB, has released its official feedback on Russia’s digital ruble project. The study included 17 ABR credit institutions in Russia, accounting for 58% of the domestic banking system’s total assets. According to the report, most ARB members believe that risks associated with the national digital currency are similar to those of cashless transactions powered by banking accounts and cards and cryptocurrencies.
The association also mentioned risks related to the offline implementation of a digital ruble.
The association also pinpointed some risks related to the offline implementation of a digital ruble, including risks associated with regulators’ inability to trace fraudulent transactions. “Offline payments significantly reduce the possibility of detecting and preventing fraudulent payments, and this digital ruble model would be especially dangerous,” the ABR noted in the press release. The Bank of Russia released its first consultation paper on developing a digital Russian ruble back in October 2020.
Central banks continue to explore CBDCs.
Several major central banks are now actively researching central bank digital currencies and making plans for real-world testing. Though many smaller economies have already launched versions of their digital currencies, China is the only major one to complete the development and initiating a full-fledged plan to test the digital yuan. As reported earlier, the Cayman island launched a national digital currency this year. Countries, including Canada, Japan, the Philippines, and many others, are actively exploring national digital currencies. China has already launched several pilot projects to test its digital yuan and is now preparing for a widespread launch.