Russians turn to cash as wartime economy stalls

Russians turn to cash amid shrinking wartime economy

Since the conflict entered its fifth year, Russians turn to cash to sidestep digital payment restrictions and evade escalating tax liabilities. Official data indicate cash transactions rose ↑ 22% compared with pre‑war levels, while corporate tax filings fell ↓ 15% over the same period.

Internet shutdowns force a cash surge

Mobile broadband outages in major cities have crippled e‑commerce, prompting retailers to accept physical currency. Analysts at Reuters note that the cash spike mirrors patterns observed after the pandemic when consumers hoarded banknotes.

“The cash fallback is a defensive move, not a sign of prosperity,” says Dmitri Ivanov, senior economist at Moscow State University.

Tax evasion schemes have multiplied, with small firms reporting up to 30 % of revenue in undeclared cash. The trend adds pressure to an already strained fiscal framework, as highlighted by a recent Bloomberg analysis.

Analysis by: Victor Hale

Equities & Market Dynamics Analyst