The Russian cryptocurrency and blockchain association known as RAKIB warned the country’s central bank against making its future central bank digital currency too centralized.

RAKIB sent a letter to Bank of Russia Chairwoman Elvira Nabiullina saying the potential design for the “digital ruble” favored by the regulator will return the Russian economy to the Soviet model, when all the financial activities were managed in a centralized way, according to a report in the Russian newspaper Kommersant on Friday.

RAKIB said that even the China’s DCEP model, where the banks are in charge of individual digital yuan accounts, is more market-friendly and stimulates competition between banks. The Bank of Russia, on the contrary, seems to lean toward a model in which it will be the only issuer of the digital rubles, with all the accounts in a centralized system on which banks will offer products.

In such case, the retail banks will not be able to add the digital ruble accounts of their clients to existing balance sheets, and there is a chance retail users will leave the banks for a centralized digital ruble platform, RAKIB’s advisory board member Vladislav Martynov told Kommersant.

According to the Bank of Russia’s concept, the digital ruble will not be a replacement to bank accounts or physical cash but a third form of money in Russia, which will exist in parallel with the other two.

The letter by RAKIB echoed the sentiment expressed earlier by some of Russia’s banks and financial market players, which are concerned that if the Bank of Russia chooses the centralized model retail banks will be put at a disadvantage. Banks will have to compete with the regulator for clients’ deposits while also having to spend their own resources on the digital ruble integration into the economy, experts said.

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