Russian Lawmaker Predicts Central Bank Digital Currencies and Blockchain Technology to Displace Traditional Banks
Summary:
Central bank digital currencies (CBDC) and blockchain technology are predicted to replace traditional banks, according to a Russian lawmaker. The adoption of the digital ruble may lead to a decrease in the role of banks, with private banks being encouraged to participate in the digital financial assets and digital ruble infrastructure. The Bank of Russia has set a daily limit for digital ruble usage, and concerns have been raised by local banks regarding the impact of the digital ruble. Similar concerns have been observed in other countries, such as Colombia.
Digital ruble adoption and blockchain technology are set to overshadow traditional banks, according to Anatoly Aksakov, head of Russia's parliamentary financial committee. Aksakov anticipates that the traditional banking system will gradually fade away with the introduction of the digital ruble. He mentioned that private banks will need to explore new roles, potentially participating in the infrastructure of digital financial assets and the digital ruble. Aksakov also revealed that the Bank of Russia has capped daily digital ruble usage at 200,000 rubles, aiming to separate the banking system from money. As Russia advances its central bank digital currency (CBDC) rollout, local banks have expressed concerns about the implications of the digital ruble. The Association of Russian Banks recently requested clarity from the Bank of Russia regarding compensation for creditors and rules around citizens opening digital ruble accounts. Deputy governor Olga Skorobogatova suggested that banks would need to offer more enticing loyalty programs as a result of digital ruble adoption. This shift towards CBDCs and blockchain technology has also raised concerns among banks in other countries, such as the central bank of Colombia recommending limitations on CBDC holdings and spending to maintain commercial banks' relevance.
Published At
9/6/2023 8:21:54 AM
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