Updated

Updated · bbc.co.uk · Jul 18

Russia Adds 1.56 Trillion Roubles in Cash as Internet Shutdowns Disrupt Card Payments

Updated

Updated · bbc.co.uk · Jul 18

Russia Adds 1.56 Trillion Roubles in Cash as Internet Shutdowns Disrupt Card Payments

Q: Amid internet shutdowns and a cash surge, are Russians being forced back into a pre-digital era?

Yes. Russians are not abandoning digital life by choice so much as being pushed into a more cash-heavy, less reliable system by wartime disruption, state internet controls and tax pressure. The clearest driver is repeated mobile internet shutdowns imposed after Ukrainian drone attacks. In major cities and many regions, outages have disrupted card payments, banking apps, ATMs, taxi services, deliveries and routine communication. That has made cash a practical backup. Central Bank data show 1.56 trillion roubles added to circulation since the start of 2026, with 550 billion roubles withdrawn in May alone, one of the sharpest jumps outside the pandemic. Similar spikes followed the 2022 mobilization and the 2023 Wagner mutiny, showing Russians turn to cash when the system feels unstable. This is also an economic story. Businesses are increasingly asking for cash to avoid higher taxes after VAT rose from 20% to 22% and thresholds for smaller firms were tightened. Sberbank says a growing share of cash is not returning to banks, a sign that more trade is moving into the shadow economy. That helps firms survive, but it weakens tax collection just as the state faces a widening budget deficit and slowing growth. So this is not a full return to a pre-digital era: e-commerce and online services still exist, and Russia remains digitally capable. But in everyday payments and basic routines, many Russians are being forced into analog habits because digital access is no longer dependable.

2 articles · Updated · bbc.co.uk · Jul 18

1.56 trillion roubles has entered circulation in Russia since January—the biggest rise for this period outside the pandemic—as households and firms shift back to cash.
Mobile internet shutdowns imposed during Ukrainian drone attacks have repeatedly knocked out card payments, while businesses under tax pressure are steering customers and wages off the books.
550 billion roubles was withdrawn from bank accounts in May alone, including 200 billion from fixed-term deposits, even though Sberbank still offers about 10% on one-year deposits.
The cash shift is colliding with the Kremlin’s revenue drive after January’s VAT increase to 22%, with a May SME survey showing 6% of entrepreneurs had turned to grey schemes.
Russia’s economy ministry cut its 2026 growth forecast to 0.4% in May, underscoring how war strain, slower growth and security measures are now undermining tax collection.