Central bank digital currencies (CBDC) and blockchain technology are expected to surpass traditional banks, as stated by a lawmaker in Russia. Anatoly Aksakov, the head of Russia’s parliamentary financial committee and a well-known skeptic of Bitcoin (BTC), predicts that the traditional banking system will gradually fade away with the introduction of the digital ruble. Aksakov made this statement during a meeting at the AIF Media forum, asserting that the role of banks will decrease as blockchain technology continues to develop.
Aksakov further mentioned that private banks will need to seek alternative purposes and could potentially participate in the infrastructure of digital financial assets and the digital ruble. He emphasized, “The traditional role that they served will gradually fade away.” Furthermore, the Bank of Russia has imposed a daily limit of 200,000 rubles (approximately $2,000) for the use of digital rubles. Aksakov explained that one reason for this limitation is to separate the banking system from money, as individuals from banks will have to transition to the central bank’s system.
As Russia progresses with its CBDC rollout, conducting initial trials in August 2023, local banks have expressed growing concerns about the potential implications of the digital ruble. The Association of Russian Banks recently sent a letter to the Bank of Russia, requesting clarification on whether creditors will be compensated for granting access to the digital ruble platform. Additionally, the banks urged the central bank to officially prohibit the mandatory opening of a digital ruble account for citizens.
In a related development, Olga Skorobogatova, the first deputy governor of the Bank of Russia, suggested that the adoption of the digital ruble would incentivize banks to offer more enticing loyalty programs. She affirmed that the competition resulting from CBDC adoption would ultimately benefit consumers, as they will have access to a wide range of non-cash payment tools.
The concerns raised by Russian banks are not unique, as financial institutions worldwide grapple with the increasing adoption of CBDCs and blockchain technology. The central bank of Colombia, for example, recently proposed imposing limits on CBDC holdings and spending to ensure commercial banks retain their relevance as service providers for storing value.
In conclusion, the head of Russia’s parliamentary financial committee predicts the gradual replacement of traditional banks by CBDCs and blockchain technology. The development of the digital ruble is causing concerns among local banks, sparking discussions about compensation for providing access and the mandatory opening of digital ruble accounts. As the global financial landscape adapts to CBDC adoption, it remains to be seen how traditional banks will pivot to remain competitive and relevant in the evolving digital era.
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