Russians return to cash amid war-related economic woes and tech outages, echoing Soviet past

Russians are increasingly reverting to cash transactions, a trend reminiscent of the Soviet era. This shift comes after years of growing preference for cashless payments. The primary drivers are frequent mobile internet outages that disrupt card payment systems. Additionally, some businesses are reportedly using cash to avoid paying taxes as economic difficulties mount due to the war in Ukraine.

The reliance on cash was once common in Russia but had been declining significantly with the advent of widespread digital payment options. However, the instability of digital infrastructure, particularly mobile internet, has made card and mobile payments unreliable. This unreliability forces consumers and businesses alike to return to physical currency.

This move back to cash also highlights a desire among some entrepreneurs to operate outside the formal tax system. As the economic consequences of the conflict in Ukraine continue to strain the Russian economy, tax evasion becomes a more attractive, albeit illegal, option for some to mitigate financial pressures.