Central bank digital currencies (CBDC) and blockchain technology are likely to displace traditional banks, according to a lawmaker in Russia.
Anatoly Aksakov, head of Russia’s parliamentary financial committee and a major skeptic of Bitcoin (BTC), has predicted that the traditional banking system will “fade away” with the adoption of the digital ruble, the local news agency RIA reported.
“As for the role of banks, I think that their role will decrease in the future with the development of blockchain,” Aksakov said at a meeting of the media forum AIF Media.
Private banks will have to find a new use and they would be able to participate in the infrastructure of digital financial assets and the digital ruble, Aksakov said, adding:
“The traditional role that they served will gradually fade away.”
Aksakov also noted that the Bank of Russia has limited the daily use of digital rubles at 200,000 rubles, or roughly $2,000. “One of the reasons is the separation of the banking system from money, because people from banks will have to move to the central bank’s system,” he added.
As Russia has been progressing with its CBDC rollout — launching first trials in August 2023 — local banks have been growing increasingly concerned about the potential implications of the digital ruble.
Last month, the Association of Russian Banks reportedly sent a letter to the Bank of Russia, asking the regulators to clarify whether it would compensate creditors for providing access to the digital ruble platform. The banks also asked the central bank to officially prohibit forcing the citizens to open a digital ruble account.
On Aug. 1, Bank of Russia’s first deputy governor Olga Skorobogatova suggested that digital ruble adoption would force banks to offer “more interesting loyalty programs.”
“In this competition, in any case, the consumer will win, who will be able to use the entire set of non-cash payment tools,” Skorobogatova stated.
Russian banks aren’t the only ones that are concerned about their future amid the increasing adoption of CBDC and blockchain technology. In mid-August, the central bank of Colombia recommended putting limits on CBDC holdings and spending to help commercial banks stay relevant in terms of keeping their role as service providers for storing value.