Russian Lawmaker Predicts CBDCs Will Diminish Traditional Banks

According to a Russian lawmaker, central bank digital currencies (CBDCs) and blockchain technology will likely displace traditional institutions.

RIA reported that Anatoly Aksakov, chairman of Russia’s parliamentary financial committee and a prominent Bitcoin skeptic, has predicted that the traditional banking system will “fade away” with the adoption of the digital ruble.

“I believe the role of banks will diminish in the future as a result of blockchain technology,” Aksakov stated at a meeting of the AIF Media media forum.

Private institutions will be able to participate in the infrastructure of digital financial assets and the digital ruble, according to Aksakov, who also noted that the Bank of Russia has capped the daily use of digital rubles at 200,000 rubles, or approximately $2,000. He added:

“The traditional role that they served will gradually fade away.”

“One of the reasons is the separation of the banking system from money, as bank employees will be required to move to the central bank’s system,” he explained.

As Russia progressed with its CBDC rollout, commencing initial trials in August 2023, local banks grew increasingly concerned about the digital ruble’s potential consequences.

The Association of Russian Banks reportedly sent a letter to the Bank of Russia last month, requesting clarification on whether creditors would be compensated for access to the digital ruble platform.

The banks also requested that the central bank prohibit mandating that citizens establish a digital ruble account. Olga Skorobogatova, the first deputy governor of the Bank of Russia, stated on August 1 that the adoption of the digital ruble would require banks to implement “more interesting loyalty programs.

“In this competition, the consumer will win in any case, as they will be able to use the entire range of non-cash payment methods,” stated Skorobogatova.

Amid the increasing adoption of CBDC and blockchain technology, Russian institutions are not the only ones worried about their future.

In mid-August, the Colombian central bank recommended limiting CBDC holdings and spending to help commercial banks maintain their function as value-storage service providers.