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Kalashnikov eyes digital ruble settlement as Russia aims to replace ‘dirty money’

Russian firearms maker Kalashnikov Group is ready For the transition to settlements in digital currency. The announcement came from the International Economic Forum in St Petersburg, where Russia’s central bank reaffirmed its intention to replace the “dirty” and “contagious” paper cash with the digital ruble, which is currently under development.

Russia’s Kalashnikov concern looks forward to adopting the digital ruble

Major Russian gun maker, Kalashnikov Group, wants to switch to digital currency settlement, owner Alan Lushnikov said during the St. Petersburg International Economic Forum. Held annually in Russia’s second largest city, the event gathers government officials and business leaders from more than 100 countries to discuss ways to overcome economic barriers between their nations and the Russian Federation. Quoted by TASS, Lushnikov said:

What we would expect from the banking system is to switch to a non-banking system of settlement. Digital currencies are spoken all the time. That’s what we need a lot.

A digital currency system would not be linked to SWIFT, the international bank messaging network, and would not be controlled by bankers, stressed Alan Lushnikov, who has served as deputy minister of transport in the past. Russia, which is subject to Western sanctions over the annexation of Crimea and Moscow’s involvement in the Ukrainian conflict, has been threatened by the EU and the US to disconnect from the interbank payment system.

Kalashnikov eyes digital ruble settlements as Russia aims to replace 'dirty money'

Dozens of central banks around the world are working on projects to issue national digital currencies, including: China, Were United States of america, And this Eurozone. The Bank of Russia is preparing to unveil a prototype digital ruble Towards the end of 2021. Commenting on the matter, its deputy governor Olga Skorobogatova said Development of central bank digital currencies in December (CBDC) may render obsolete traditional banking systems such as SWIFT.

Digital currency to replace ‘dirty’ paper cash, says central bank official

Cash, as we know it today, is a fading technology, according to Sergei Shvetsov, an associate of Skorobogatova, the first vice president of the Bank of Russia. A high-ranking official at the St. Petersburg Forum said that within a few decades, paper money will be considered marginal and will eventually be replaced by digital currencies. He was quoted by TASS as saying that cash is not only “dirty” but can also spread infection in light of the ongoing COVID crisis:

They say “dirty money,” but now it’s contagious, too. Sure, it’s just an obsolete technology.

Shvetsov said the coronavirus pandemic has contributed to the abandonment of cash. In his opinion, even now paper banknotes are mostly used either for “gray business”, or in the absence of options allowing non-cash payments.

“I think someday, in 20 to 30 years, cash will be marginal. The digital ruble should take its place, ”the deputy governor elaborated, emphasizing that the Bank of Russia is yet to make a final decision on the future of the project. And the speed of its development will depend on “technical preparedness”, Shvetsov pointed out.

What is your opinion about central bank digital currencies? Share your thoughts on this topic in the comment section below.

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