A member of the Russian Duma has proposed the creation of a central bank digital currency (CBDC) to displace the private banking sector. The suggestion was made by Anatoly Aksakov, the chairman of the State Duma Financial Market Committee and a member of United Russia Party.
Aksakov proposed that digital currency could play an important role in the development of the country’s financial system. He suggested that the currency should be issued by the Central Bank of Russia and that it should replace the traditional banking sector. Aksakov stated that the currency would be a “store of value,” and could be used for transactions between banks, business, and retail customers. He also stated that the currency could be used to help achieve financial inclusion and reduce poverty in rural areas.
The suggestion was made as part of a number of proposals that were put forward in the State Duma Banking and Money Circulation Law, which is currently in its second reading. As it stands, the law does not address digital currencies, but the suggestion of a CBDC could be seen as a progressive step in the right direction.
Although the proposal may be well-intended, it could be argued that a CBDC could prove to be a threat to the banking industry. Companies that are currently in the banking sector would be forced to compete with the centralized CBDC, significantly reducing their market share. Therefore, only time will tell if the suggestion will be taken further.