Russia's top official declares traditional banking must 'die' for digital finance to thrive

Deputy Head of the Presidential Administration Maxim Oreshkin has explained that the traditional banking model has outlived its usefulness and must become a thing of the past. "Banks, in their traditional form, should actually die," Oreshkin stated, clarifying that the reason lies in the high cost of financial intermediation for the economy and society.

As an example, he cited the U.S. financial system, which, according to Oreshkin, "consumes 2% of global GDP." He called this "an excessively high price for humanity to pay for a relatively simple service of managing funds."

Oreshkin emphasized that people's need for financial services—transactions, capital raising, and savings—will persist. "The only question is how to meet those needs," he noted. Today, competition is no longer based on closed data silos but on the quality of algorithms and services, he added. In his view, the economy is moving toward reducing transaction costs.

In late January, speaking at the January Expert Dialogues at the Russia National Center, Oreshkin declared that digital currencies and platform-based solutions would take over the functions of traditional commercial banks. He suggested that this shift could spur growth in developing regions—for instance, enabling African farmers to access decentralized financial services and global investment flows.

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