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.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.