Factors and Consequences of the Distribution of retail Central Banks Digital Currencies: Global Experience and Conclusions for the Digital Ruble

The spread and popularization of cryptocurrencies, as well as the rapid digitalization of the payment sector, have prompted many monetary authorities, including the Bank of Russia, to develop central bank digital currencies (CBDCs). The upcoming launch of the digital ruble makes it relevant to study the consequences of its implementation. The purpose of this paper is to study the prospects for launching CBDCs in Russia based on existing international experience. For this purpose, firstly, an overview of the main risks and consequences of issuing digital currencies was conducted. Secondly, through statistical and graphical analysis, the practical experience of the circulation of eNaira (Nigeria), Sand Dollar (Bahamas) and e-CNY (China) was studied, taking into account country differences in inflation and interest rates: the impact of CBDC emission on the dynamics of narrow money supply components; cross-country comparison of the speed of digital currency spread relative to cash and narrow money supply. Third, factors influencing the level and heterogeneity in the speed of digital currency spread were summarized. Fourth, based on the experience gained, the prospects for launching the digital ruble were analyzed. The main concerns regarding the emission of the CBDC are related to the risks of disintermediation and "bank runs" during crisis episodes. In order to be able to control possible negative consequences, monetary authorities, including the Bank of Russia, install in the design of the digital currency the absence of interest payments, a two-tier administration system, limits on the volume of transactions and storage. The experience of Nigeria, the Bahamas and China indicates, firstly, that the main concerns regarding the launch of the CBDC will not come true in the first years of circulation, and secondly, that the new means of payment is rolling out extremely slowly. The analysis highlights the importance of careful planning of the strategy for implementing the digital ruble, including multiple channels for informing people about the advantages of the new means of payment, as well as ensuring a wide coverage of sellers and scenarios for using the digital currency of the Bank of Russia.