Russian lawmakers believe digital ruble will replace banks

Anatoly Aksakov, head of Russia’s Banking Committee, believes that the digital ruble could potentially render traditional banking institutions obsolete.

In a discussion at the AiF.Media club, Aksakov opined that the evolving landscape of financial technology could reduce the necessity for traditional banking institutions. However, no official plans have been laid out to phase out banks in Russia.

“The future of banking could undergo a significant transformation due to the advancement of blockchain technology and central bank digital currencies.”

Anatoly Aksakov, head of Russia’s State Duma Banking Committee

Although the Central Bank of Russia has yet to enable loans in digital rubles, Aksakov is optimistic that this is a logical next step. He believes financial transactions would be expedited and possibly become more efficient if conducted in digital rubles.

Moreover, Aksakov contends that automation facilitated by this digital technology could further render traditional banks obsolete.

“In the future, decisions will likely be automated, negating the need for human intervention. This could essentially make the conventional banking institution redundant as the digital ruble becomes increasingly technologically sophisticated.”

Anatoly Aksakov

Since Russia’s massive invasion of Ukraine in late February 2022, which led to the escalation of the Russo-Ukrainian war, the country has been subjected to heavy financial and economic sanctions that have since propelled its authorities to explore cryptocurrencies as its payment option for foreign trades. 

In September 2022, an agreement was reached between the Bank of Russia and the Ministry of Finance over a regulation permitting Russians to send cross-border payments using cryptocurrency.

In this context, Russia has initiated a pilot program to assess the functionality of a digital ruble in partnership with multiple banking institutions.

However, introducing a digital ruble won’t alter or improve the geopolitical situation in which Russia finds itself. Moreover, the officials stated that CBDC platform trials could only be conducted with nations that are “friendly” to the Russian government and technologically capable.