Cash Use Surges in Russia as War Disrupts Digital Payments and Economy
Russians are increasingly turning to cash as mobile internet shutdowns disrupt card payments and more businesses seek to avoid taxes amid mounting financial pressure more than four years into the war with Ukraine, according to central bank data analysed by the BBC.
Russia has added 1.56 trillion roubles (about £14.8 billion or $20 billion) in cash into circulation since the start of the year. This is the biggest increase for the equivalent period in any year outside the COVID-19 pandemic, central bank figures show.
The surge in cash usage comes amid a wave of Ukrainian drone attacks that have repeatedly led Russian authorities to shut down mobile internet across large parts of the country. These shutdowns have left many people unable to pay by card. The government says the measures aim to counter the drone strikes.
“Having cash on hand gives you some sense of control and security,” one woman in Moscow told the BBC on condition of anonymity. “If there’s an emergency in the city, I know I’ll still be able to buy basic necessities, even if the mobile network goes down.”
The shift towards cash is also being driven by businesses seeking to evade taxes under increasing economic strain. The war, now in its fifth year, has placed significant pressure on Russia’s economy, including inflation and sanctions. The move to cash can help businesses underreport transactions, but it also puts additional strain on the formal economy by reducing tax revenues and complicating monetary policy.
Economists note that the trend reflects growing uncertainty among the population and businesses. The reliance on cash could further weaken the government’s ability to manage the economy effectively. As digital payments become less reliable, the demand for physical currency is expected to remain high.
