The development of digital financial technologies, including Bitcoin and other cryptocurrencies, may have a negative impact on the financial position of banks. This statement was made by Deputy Chairman of the Central Bank of Russia Vasily Pozdyshev.
Pozdyshev declared «I believe that the year 2019 is a turning point in the development of financial technology in the banking industry, this year the so-called bigtechs are large corporations that are already successfully operating in the area related to the provision of services on a high-tech base — they are seriously attacking the traditional banking model». “A significant mass of small deposits, funds in the accounts, indeed, will come out of the deposit insurance systems. On the one hand, the base for deductions will be reduced, on the other hand, I fully assume that this may worsen the financial situation of the banks themselves, because these liabilities are the cheapest for the bank. This may increase the probability of bankruptcy of these banks, no one has yet appreciated the consequences of this, ”Pozdyshev emphasized.
Does this process have negative consequences? In the long run, no. Sooner or later, any system evolves and changes, and this is not always a bad thing. New technologies, such as ERTC, lead not only to improving the quality of financial relationships, but also to an increase in comfort.