CBDCs to Displace Private Banks, Predicts Russian Lawmaker

CBDCs to Displace Private Banks, Predicts Russian Lawmaker

 Russia started pilot testing CBDCs in August and looking for ways of implementation. A Russian lawmaker predicted that if CBDC (Central Bank Digital Currency) works out efficiently, it will displace the private banks. Moreover, he believes that CBDCs and blockchain technology are the future of finance and can root out the monopoly of private banks.

Private Banks to Fade Away?

RIA, a local news agency of Russia released a report which disclosed many facts and figures related to CBDC adoption. In the report, Anatoly Aksakove, the head of the Parliamentary Financial Committee of Russia gave his views in this regard. He says that it is more like that CBDC adoption has the ability to advance the financial system and displace the traditional banking system.

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Traditional banking systems have confined the financial systems by imposing restrictions. By adopting the CBDC-based ‘Digital Ruble’, it is expected that private banks will fade away.  Anatoly is a Bitcoin skeptic and his interest in the crypto industry made him talk about ongoing scenarios.

In a meeting for AIF Media, he said that he believes that in the coming time, the pivotal role of banks will decrease with the adoption and development of digital currency and blockchain technology. And to cope with that banks should play their role in building infrastructure for digital currency and digital ruble.

Russian Banking System

According to Anatoly’s observation, the Bank of Russia has a restricted digital ruble’s regulatory volume which is approximately $2,000 or 200,000 digital rubbles. The main reason he mentioned is that as people have to go through a proper traditional banking system. There are different banking systems linked to the Bank of Russia which makes it a complex process to regulate digital currency.

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The Association of Russian Banks wrote a letter to the Bank of Russia to confirm whether to compensate the creditors with the access to digital rubble platform. Anatoly Aksakove believes that CBDC would bring revolution and take control over finance by introducing digital rubble. Such adoption will definitely displace the traditional banking system.