- Russian lawmaker Anatoly Aksakov predicts that banks may become obsolete as the role of Central Bank Digital Currencies (CBDCs) grows, specifically referencing Russia’s digital ruble.
- Aksakov suggests that automation and blockchain technology could allow for banking functions to be directly managed by central banks, raising concerns about centralized control and consumer choice.
A Paradigm Shift: How CBDCs Could Reshape Traditional Banking
Anatoly Aksakov, chair of Russia’s State Duma Banking Committee, recently spoke candidly about the inevitable decline of conventional banks as blockchain-based Central Bank Digital Currencies (CBDCs) like the digital ruble gain ascendancy. His assertions, which emerged in a conversation with the state news agency RIA, offer a provocative look into how this nascent technology could upend established financial paradigms.
Legislation’s Stranglehold on Digital Ruble
As it stands, Russian legislation has placed certain constraints on the utility of the digital ruble. For instance, bank deposits cannot be made in digital rubles, nor can loans be denominated in this form of currency. Moreover, the Russian Central Bank has instituted a daily spending limit of 200,000 rubles ($2,043) and a monthly top-up restriction of 300,000 rubles ($3,064) for the digital ruble.
Aksakov posited that these regulatory barriers will eventually need to be dismantled.
“My personal opinion is that after some time we will make a decision that deposits can be placed at the Central Bank and loans can be issued, since life requires it. Because it will be faster and, perhaps, more efficient,”
he commented. He also suggested that as blockchain becomes increasingly integrated into financial systems, human intermediaries and even institutional structures like banks might become superfluous.
“Decisions will be made by a robot—a person is not needed there,”
he opined.
A Tipping Point for Centralization and Control?
However, the transformation Aksakov envisions is not without its pitfalls. Such a centralized, automated system raises concerns about the diminishment of consumer choice and increased governmental oversight. Interestingly, survey data has not indicated an overwhelming public enthusiasm for a digital ruble, partly due to a general lack of awareness. Traditional banks, as potential intermediaries for CBDCs, also express apprehension about the costs involved.
As the digital transformation unfolds, the notion of money “coloring”—a term used to describe restricted uses for certain forms of currency—becomes increasingly relevant. Alexey Zabotkin, Deputy Governor of the Bank of Russia, notes that while these restrictions could reduce the liquidity and overall value of the digital ruble, the potential for such functionality will be
“considered at later stages.”
Aksakov’s projections for the digital ruble and the concomitant obsolescence of traditional banks prompt a broader discourse on the role and function of financial institutions in an increasingly digitalized world. Whether these assertions will materialize into reality remains a subject of fervent debate and watchful anticipation.
