Cash is making a comeback in Russia as digital payments grow more unreliable with frequent mobile Internet outages the Kremlin says are aimed at countering the threat of Ukrainian drone attacks.
The amount of cash in circulation jumped by about 600bil rubles (US$8bil/RM31.6bil) in April. That’s the biggest monthly increase – excluding annual spikes in December – since September 2022, when President Vladimir Putin announced a partial mobilisation for the war in Ukraine, according to Bloomberg calculations based on data from the Bank of Russia.
Cash in circulation in Russia expanded by more than 1.1 trillion rubles (RM57.59bil) over the past three months, more than the increase recorded for the whole of 2025, the calculations show. The central bank has previously said that this year’s increase in cash may be linked to repeated mobile Internet shutdowns, which have forced consumers and businesses to hold physical money to cover everyday payments.
That’s a stark contrast from just recently when Russians had largely abandoned banknotes, opting for digital methods like payment stickers and smartphone apps. The renewed embrace of cash underscores the tradeoff between security and economic efficiency, as drone defence measures revive habits many assumed were becoming obsolete.
In April, Putin acknowledged for the first time the Internet access issues in major cities, arguing they were needed to "prevent terrorist acts,” while also urging law enforcement agencies to take into account the interests of citizens.
Widespread Internet outages have occurred in many regions of Russia during the war with Ukraine, but this year they also hit Moscow, a city of more than 13 million people.
Kremlin spokesman Dmitry Peskov in March defended the measures as necessary "to ensure citizens’ safety,” even as they disrupted daily life and prompted sarcastic comparisons to the Stone Age.
Residents have been forced to print electronic tickets, order taxis by landline phone and cope with the inability to pay for parking. Sales of offline communication tools such as handheld radios and pagers, as well as paper maps, have surged as people adapt to shutdowns.
The disruptions are also rippling through businesses. Russian companies have increased purchases of telecommunications equipment designed to bypass Internet restrictions by 82% over the past 12 months, according to data from procurement platform TenderPro provided to Bloomberg. Demand for satellite Internet equipment alone has doubled.
The Internet outages have complicated operations for many firms, prompting businesses in metals, oil and gas, chemicals and agriculture to invest heavily in alternative communication methods to maintain uninterrupted activity, TenderPro said.
Ahead of the Kremlin’s annual May 9 military parade marking victory in World War II, network operators warned of potential mobile Internet and SMS disruptions over several days across the capital.
Disruptions were reported in the capital on Tuesday, and people who hadn’t withdrawn cash risked running into problems as many ATMs rely on mobile connections, the Kommersant newspaper reported. The outages have affected taxi drivers, couriers and others who depend on reliable mobile Internet. – Bloomberg
