Benzinga - by Murtuza Merchant, Benzinga Staff Writer.
The rise of Central Bank Digital Currencies (CBDCs) and blockchain technology is signaling a transformative era for the global banking sector.
That's according to Anatoly Aksakov, Chair of Russia’s parliamentary financial committee.
"The traditional role they played will gradually fade away," Aksakov remarked during the AiF.Media expert media club session, hinting at the diminishing significance of conventional banks in the face of these digital advancements.
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Aksakov further highlighted the potential of blockchain technology.
"As for the role of banks, I think that their role will fade in the future with the development of blockchain, he said." While traditional banks might find a role within the infrastructure of digital assets, their conventional significance is likely to wane.
Since the inception of the digital ruble on Aug. 1, the Bank of Russia has been at the forefront of this digital revolution.
The digital ruble, a counterpart to both cash and non-cash forms of the currency, is exclusively stored on the Central Bank's platform, emphasizing the move towards centralized digital systems.
Aksakov also touched upon the Central Bank's current limitations on daily digital ruble transactions but expressed optimism about the future. He envisions a time when these restrictions will be lifted, making way for a more efficient and faster banking system, all powered by digital currencies and technology.
"Decisions will be made by a robot — a person is not needed there. Perhaps a bank is not needed as an institution, since the digital ruble will be very much technologized," he said, underscoring the potential of CBDCs and blockchain to revolutionize the banking sector.
Over the past 18 months, following Russia's incursion into Ukraine, the ruble experienced significant fluctuations. Western sanctions aimed at Russia's foreign currency reserves and vital energy exports in response to the invasion. Despite plummeting past 100 against the dollar post-invasion, factors like strict financial regulations, rising energy costs, and a decline in Russian imports propelled the ruble to be 2022's top-performing currency.
However, Europe's decision to stop buying Russian oil and gas, coupled with initiatives like the G7's oil price limit, has recently weighed down the ruble again.
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