Technological hurdles brake Russia's banks on the way to the digital ruble: Almost a third of the institutes unprepared for the implementation of the new currency

<P> <strong> Technological hurdles brake Russia's banks on the way to the digital ruble: Almost a third of the institutes unprepared for the implementation of the new currency </strong> </p>

Technological hurdles in the introduction of the digital ruble in Russia

According to a current report by the Russian news station Vedomosti, almost a third of the Russian banks are prepared for technological challenges in their preparation for the digital ruble, a digital central bank currency (CBDC). A survey carried out by Flant and Diasoft among over 150 banking transactions shows that 30 % of the financial institutions do not have the necessary IT infrastructure to support the country's digital currency.

The results of the survey are particularly relevant because the Bank of Russia recently announced to postpone the mass implementation of the digital ruble, which was originally planned for July 1, 2025.

Technical standby levels in the banking sector

The survey, the technical directors, IT directors, architects, digital transformation managers and devops engineers surveyed, reveals significant differences in the deployments and the technical infrastructure in the Russian banking sector. Only 20 % of the respondents stated that their systems and internal regulations fully meet the requirements for implementing the digital ruble.

Half of the respondents (50 %) consider their willingness to partly, which indicates that preparations are in progress but are still required to improve. The remaining 30 % of those surveyed indicate that their systems are inadequate for the integration of the CBDC.

security concerns are also a central topic. 14 % of the respondents ensured about the risks for information security, which result from the strict data protection requirements in the financial sector and an increased risk of cyber attacks.

The survey also shows a gap between large and small banks. Oleg Vylegzhanin, Devlonika resource director (Softline Group), found that many medium-sized and small banks that work in regional or specific industries are often not geared towards digital assets and are therefore severely restricted in their ability to invest in IT development.

shift of the implementation time plan

The digital ruble is the third national currency of Russia after President Vladimir Putin signed the law to implement in July 2023. Originally, a mass start for July 1, 2025 was planned, but the central bank said in February that this period would be postponed due to bank inquiries. A new date for the mass start has not yet been determined.

According to governor Elvira Nabiullina, the pilot program runs with a limited number of participants, including 1,700 citizens and around 30 companies in 15 banks, including Sberbank, VTB, Alfa-Bank and Gazprombank. A representative of the Bank of Russia explained that the schedule for large high technology projects with several participants is part of a normal work process. The Central Bank plans to continue the mass implementation if all risks and problems have been remedied from the pilot project.

Some banks have recorded different progress in the integration of the digital ruble. MKB has to struggle with integration while the Prio Vneshtorgbank is on schedule, but indicates high investment costs. Dom.rf-Bank has reached minimal functional standards, but requires further development effort for the industrial phase.

Resistance and concerns of the banks

The introduction of the digital ruble is not only hindered by technical challenges. Some experts argue that institutional resistance also plays a role, especially the fear of the banks to lose control of their customers' money. Dmitry Gachko, founder of ITG Corporation, indicates that traditional banks are aware that the digital ruble may be able to restrict their control over the customer funds.

The technical requirements for implementation are high. According to Ruslan Zaedinov, director of the cloud and data department at Reksoft, banks have to develop an interface between the digital rubles and regular ruble transactions.

According to Yuri Shvydchenko estimates, Director of Tedo Technology Practice, the implementation project will take between 6 and 10 months and require a budget of around 150 million rubles. Despite the challenges, some banks, such as VTB, intend to prepare technologically within the previous time frame and are waiting for a decision by the central bank for a new start date.