Russian Banks Say Digital Ruble Will Drive up Loan Rates – New CBDC Dangers?
A major Russian banking association has warned that the digital ruble will drive up loan rates as banks struggle to cope with the soon-to-be-issued CBDC.
The Central Bank last month launched an 11-city “real-world” CBDC pilot in conjunction with 13 commercial banks.
But banking organizations have already expressed “concern” about the project, and the Central Bank was rocked by the eleventh-hour withdrawals of heavyweights Sberbank and Tinkoff Bank.
Per Izvestia, the Association of Banks of Russia Vice-President Alexey Voylukov said the CBDC project could see loan rates rise by 0.5%.
He said:
“If we take into account the direct and indirect costs of introducing the digital ruble, the cost of money for lending will climb even higher.”
The comments come over a month after the association sent a letter to the Central Bank with “a request to clarify certain issues pertaining to the digital ruble.”
The association claimed that citizens were “wary” of the coin.
Business leaders, meanwhile, have also expressed their reservations.
Izvestia also spoke to other experts, who issued similar warnings.
Georgy Vashchenko, the Deputy Director of the analytical department at Freedom Finance Global, claimed that banks could be hit to the tune of over $31 billion.
Vashchenko said there was a “risk of banks losing about 5% per year in profits.”
The investment banker and National Research University Higher School of Economics professor Yevgeniy Kogan also echoed the sentiments.
Kogan said:
“The head of the State Duma’s [Financial Markets] Committee, Anatoly Aksakov, has stated that as the CBDC is introduced, the Russian banking system will gradually fade away. It’s interesting to note that, just recently, the Central Bank assured the sector that this
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