More Russians Embrace Non-Cash Payments
A recent study conducted by SberIndex and Check Index found that the share of non-cash payments in Russia reached 64.2% in the third quarter of 2023, surpassing the previous record of 63.3%. The study also revealed a +3.6% increase in non-cash turnover compared to the same period in FY 2022. Surprisingly, remote regions such as the Nenets Autonomous Okrug, Yakutia, and the Chechen Republic showed significant growth in non-cash payments. Urban centers like Ussuriysk and Vladivostok also saw a drop in cash demand, with non-cash payments rising by almost 8%. This shift away from cash may be attributed to increased crypto adoption and preparations for the launch of a central bank digital currency (CBDC).
Retail Sector Predicted to Lead Non-Cash Payments
A VTB Bank official estimates that non-cash payments in retail turnover will reach 84% by the end of 2023, while retail point-of-sale (POS) turnover is expected to exceed 2022 figures by 18%. It’s worth noting that Russian law prohibits the use of crypto as a form of payment, but P2P crypto transactions are on the rise. Additionally, corporations are turning to crypto as a means to bypass international sanctions imposed by the US and EU.
Russian Crypto Mining Sector Expands
Energy consumption in Russia has increased by 1.2% since the beginning of the year, with an expected growth rate of 1.5% by the end of 2023. The growth can be attributed to large industrial projects, including those related to the growing crypto mining sector. Major oil producers have started collaborating with mining firms in Russia. The country’s finance ministry has announced plans to launch the digital ruble, with the goal of enabling all Russian citizens to use the central bank digital currency in 2024.
Hot Take: Cash Decline Benefits CBDC and Crypto Adoption
The increasing popularity of non-cash payments in Russia, coupled with the decline in cash usage, bodes well for the adoption of cryptocurrencies and the upcoming launch of a central bank digital currency. As Russians embrace digital payment methods, the demand for cash decreases. This shift aligns with the government’s efforts to promote a digital economy and combat corruption and fraud. While crypto payments are currently prohibited, P2P transactions are on the rise, indicating a growing interest in cryptocurrencies among Russian citizens. The future looks promising for both CBDCs and cryptocurrencies as Russia moves towards a cashless society.
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