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The Digital Ruble Could Render Traditional Banking Institutions Obsolete, Says Head of Russian Banking Commission

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Anatoly Aksakov: Digital Ruble Could Transform Traditional Banking Institutions

Anatoly Aksakov, head of the Russian Banking Commission, believes that the digital ruble has the potential to make traditional banking institutions obsolete. In a discussion at the AiF.Media Club, Aksakov argued that the evolving fintech landscape, including blockchain technology and central bank digital currencies, could reduce the necessity of traditional banks. However, it is important to note that no official plans have been made to phase out banks in Russia.

The Potential of the Digital Ruble

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Although loans in digital rubles have not yet been enabled by Russia’s central bank, Aksakov remains optimistic about the future. He believes that conducting financial transactions in digital rubles could lead to faster and more efficient processes. Aksakov also suggests that the automation facilitated by this digital technology could render traditional banks obsolete.

Russia’s Exploration of Cryptocurrencies

Since facing severe financial and economic sanctions following its invasion of Ukraine in February 2022, Russia has been exploring cryptocurrencies as a payment option for offshore transactions. In September 2022, an agreement was reached between the Bank of Russia and the Ministry of Finance to allow Russians to send cross-border payments using cryptocurrencies. As part of this exploration, Russia has initiated a pilot program to evaluate the function of the digital ruble in partnership with various banking institutions.

It is worth noting that the introduction of the digital ruble will not change or improve Russia’s geopolitical situation. Furthermore, officials have stated that CBDC platform trials can only be conducted with countries that are “friendly” to the Russian government and technically capable.

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