Financial & Business Association
of Euro-Asian Cooperation
Digital ruble: unraveling the unknown
Vice President of the Association of Banks of Russia Alexey Voilukov answers the most frequently asked questions about the digital rouble
WHAT POINTS ARE NOT REFLECTED IN THE LEGISLATION ON THE DIGITAL RUBLE?
First of all, we need to understand that the Bank of Russia as the holder of the digital ruble platform is increasing its workload. This work includes compliance procedures under Law No. 115-FZ. Today, banks monitor customer transactions and, if necessary, report violations to Rosfinmonitoring. With regard to the digital ruble, this will most likely be implemented on the basis of the Central Bank, as the only institution that will have all the information on the movement of funds through electronic wallets. Banks will not have information on such payments. This is stipulated in the concept of the digital ruble. Thus, only the owner of this platform will be able to fully implement all the necessary procedures in accordance with the law. Therefore, the regulator will have to extend the services for carrying out such procedures and to organize its own interaction with Rosfinmonitoring in relation to this information.
HOW WILL DISPUTES WITH THE DIGITAL ROUBLE BE RESOLVED?
In the event of any disputes that arise (and they will arise due to misunderstandings or erroneous actions by clients or as a result of technical failures), clients will first of all turn to the bank through which they made the transaction. But in this case, the financial institution acts as an intermediary for transferring this information to the Central Bank - it is there that all actions are performed and the information on funds and actions is stored. The Central Bank is the service that is responsible for consumer protection, it has organized complaint centers.
The Central Bank will take on expanded additional functionality and will interact with citizens on the subject of possible disputes: incorrect calculations, slow transactions, inability to make a payment, etc. So all communication between citizens or businesses and the regulator will gradually become direct.
CAN FRAUDSTERS STEAL DIGITAL RUBLES?
Yes, it is possible. Of course, there is a serious defense system against hacker attacks, but no one guarantees 100 per cent security, as in any IT solutions. The same social engineering, which, unfortunately, is very widespread in our country, can allow fraudsters to steal digital rubles. It is clear that this will not be direct theft, since digital rubles are essentially registered - they can be traced. But it is possible to mislead people by suggesting that they transfer their digital rubles to the wallet of some Ivan Ivanovich, who will withdraw them to his account, then to the intermediate accounts of fraudsters, and the funds will be cashed out through brokers. All of this will take literally minutes. The money will be gone, and it will be difficult to get it back, because it will require the intervention of law enforcement agencies to find the fraudsters.
WILL A SEPARATE METHOD OF PROTECTING THE DIGITAL RUBLE BE NEEDED?
There is a methodology to protect against fraudulent actions, and it will be applied, just as it is for non-cash settlements. This is Law No. 161-FZ, which stipulates that financial institutions must try to prevent theft if they doubt that a person is independently and consciously making transactions. In this case, the Central Bank will need to refine its platform in order to track the unusual nature of transactions and maybe temporarily block them in order to contact the wallet owner directly and clarify the situation. This also expands the functionality of the regulator, which has never before interacted directly with citizens or businesses.
WILL THE DIGITAL RUBLE BE USEFUL FOR CREDIT ORGANISATIONS?
It is still difficult to assess, because there are few places in the world where digital currencies are used, except for some small countries that simply have no other option, as they cannot establish the issue of cash. Banks may have problems in this regard: loss of commission income, loss of liquidity, but these are strategic global problems if you look into the future. Initially, there may be advantages in terms of customer focus - a convenient service will be offered for digital rubles, settlements, and transfers. It is difficult to speculate, because full-fledged piloting has not started and there is not much information yet.
WHAT POINTS ARE NOT REFLECTED IN THE LEGISLATION ON THE DIGITAL RUBLE?
First of all, we need to understand that the Bank of Russia as the holder of the digital ruble platform is increasing its workload. This work includes compliance procedures under Law No. 115-FZ. Today, banks monitor customer transactions and, if necessary, report violations to Rosfinmonitoring. With regard to the digital ruble, this will most likely be implemented on the basis of the Central Bank, as the only institution that will have all the information on the movement of funds through electronic wallets. Banks will not have information on such payments. This is stipulated in the concept of the digital ruble. Thus, only the owner of this platform will be able to fully implement all the necessary procedures in accordance with the law. Therefore, the regulator will have to extend the services for carrying out such procedures and to organize its own interaction with Rosfinmonitoring in relation to this information.
HOW WILL DISPUTES WITH THE DIGITAL ROUBLE BE RESOLVED?
In the event of any disputes that arise (and they will arise due to misunderstandings or erroneous actions by clients or as a result of technical failures), clients will first of all turn to the bank through which they made the transaction. But in this case, the financial institution acts as an intermediary for transferring this information to the Central Bank - it is there that all actions are performed and the information on funds and actions is stored. The Central Bank is the service that is responsible for consumer protection, it has organized complaint centers.
The Central Bank will take on expanded additional functionality and will interact with citizens on the subject of possible disputes: incorrect calculations, slow transactions, inability to make a payment, etc. So all communication between citizens or businesses and the regulator will gradually become direct.
CAN FRAUDSTERS STEAL DIGITAL RUBLES?
Yes, it is possible. Of course, there is a serious defense system against hacker attacks, but no one guarantees 100 per cent security, as in any IT solutions. The same social engineering, which, unfortunately, is very widespread in our country, can allow fraudsters to steal digital rubles. It is clear that this will not be direct theft, since digital rubles are essentially registered - they can be traced. But it is possible to mislead people by suggesting that they transfer their digital rubles to the wallet of some Ivan Ivanovich, who will withdraw them to his account, then to the intermediate accounts of fraudsters, and the funds will be cashed out through brokers. All of this will take literally minutes. The money will be gone, and it will be difficult to get it back, because it will require the intervention of law enforcement agencies to find the fraudsters.
WILL A SEPARATE METHOD OF PROTECTING THE DIGITAL RUBLE BE NEEDED?
There is a methodology to protect against fraudulent actions, and it will be applied, just as it is for non-cash settlements. This is Law No. 161-FZ, which stipulates that financial institutions must try to prevent theft if they doubt that a person is independently and consciously making transactions. In this case, the Central Bank will need to refine its platform in order to track the unusual nature of transactions and maybe temporarily block them in order to contact the wallet owner directly and clarify the situation. This also expands the functionality of the regulator, which has never before interacted directly with citizens or businesses.
WILL THE DIGITAL RUBLE BE USEFUL FOR CREDIT ORGANISATIONS?
It is still difficult to assess, because there are few places in the world where digital currencies are used, except for some small countries that simply have no other option, as they cannot establish the issue of cash. Banks may have problems in this regard: loss of commission income, loss of liquidity, but these are strategic global problems if you look into the future. Initially, there may be advantages in terms of customer focus - a convenient service will be offered for digital rubles, settlements, and transfers. It is difficult to speculate, because full-fledged piloting has not started and there is not much information yet.