According to several local financial institutions, the Russian central bank’s digital currency, or CBDC, could pose a number of risks related to cybersecurity and fraud.
The Association of Russian Banks, or ARB, has released the official feedback on Russia’s digital ruble project on January 13.
The study included 17 ABR credit institutions in Russia representing 58% of the total assets of the domestic banking system. According to the report, most ARB members believe that the risks associated with the digital ruble are similar to those of cashless transactions powered by bank accounts and cards, as well as cryptocurrencies.
The ARB specifically outlined the cybersecurity risks and warned that online settlements are often vulnerable to attacks such as unauthorized access to customer accounts, customer data and operations. There are risks of identity theft or digital ruble theft from personal account hacking or identification errors, the association noted.
According to the ARB, these cybersecurity risks are linked to all models of a digital ruble proposed by the Bank of Russia so far.
The association also pointed out some risks associated with the offline implementation of a digital ruble, including risks related to the inability of regulators to detect fraudulent transactions. “Offline payments significantly reduce the ability to detect and prevent fraudulent payments, and this digital ruble model would be particularly dangerous,” the ABR wrote.
The Bank of Russia has published its first consultation document on the development of a digital Russian ruble on October 13, 2020. The bank said users will be able to access the digital ruble on their e-wallets and mobile devices, both online and offline.
Shortly after the Bank of Russia presented its digital ruble plans, a senior official from the presidential administration said so Russia does not have to hurry. Dmitry Peskov, a special representative of the President of the Russian Federation for Digital and Technological Development, said the risks of a central bank digital currency are so great that the country needs time to investigate the matter.