In a famous statement during the 1983 election campaign, the then Prime Minister of Australia, Malcolm Fraser, claimed that “people would be better off keeping their money under the bed”. His claim related to assumed or perceived attempts by future governments to control people’s money.
One of the authors of this article was reminded of this now iconic political statement in a discussion with a prominent Australian entrepreneur, in early 2023 in Perth. His interlocutor asserted that within five years, paper money and cash would no longer exist and, hence, keeping money under one’s bed would be an exercise in futility. Instead, payments would be made by digital money controlled by the state. He recommended acquiring precious metals to preserve one’s wealth. Although the interlocutor’s prediction is not quite fulfilled yet, there have been international developments that may prove him right in the long run.
One such development comes from the Federation of Russian Republics. It is a recent development that is largely unknown in the West which focuses more on the Ukraine conflict than on Russian attempts to control the payment habits of its people. However, due to its unquestionable financial and economic importance, it behoves commentators to pay attention to this development and its likely impact on Australia. What happened?
Russia’s new digital rouble, or the central bank’s digital currency (CBDC), a paperless rouble, marks one of the most significant changes to its financial system in recent history. Since 1 September 2026, people have been able to open digital rouble wallets through their usual mobile banking apps, make payments in major retail chains, and transfer money instantly without paying any fees.[1] At first glance, this appears to be a major step forward: payments are faster, shops pay less to process transactions, and the system is run directly by the Bank of Russia, the central bank. However, the digital rouble is more than just a modern payment option. It creates a centralised financial structure in which the government sits at the centre of every transaction. When compared with China’s digital currency, the European Union’s plans for a digital euro, and Australia’s wholesale approach which focuses on improving financial markets, and not consumers, Russia’s model stands out as the most centralised and the least protective of personal privacy.
The core issue is whether this new system truly improves everyday financial life or whether it gives the state an unprecedented level of control over how people use their money.
Russia now treats the digital rouble as a third form of national currency, alongside cash and traditional bank accounts.[2] The crucial difference lies in where the money is stored. Regular bank deposits sit in commercial banks or in people’s pockets (or under the bed!), while digital roubles sit directly on the Bank of Russia’s platform, in other words, in a government-managed body. People still use their familiar mobile banking apps, but the digital wallet itself belongs to the central bank. Each citizen can have only one digital rouble wallet, irrespective of the number of bank accounts, and they can move up to 300,000 roubles per month, roughly AU$5,000, from their bank account into it. Digital roubles do not earn interest, cannot be used for savings or loans, and must be accepted by large retailers. The government can see every transaction made with digital roubles, and the system currently does not allow offline payments, meaning it cannot be used without an internet connection.
Although the digital rouble is not a banking product, it functions as a state‑run payment tool for transaction settlement. The central bank describes its use as voluntary, yet the design of the system makes opting out increasingly difficult. Once major retailers are required to accept digital roubles and government payments (such as state pensions, state subsidies, etc) begin shifting toward the new system, avoiding it becomes impractical for most people, if not impossible.
To be fair, the digital rouble does offer real advantages. Payments are free and instant, which is a meaningful improvement in a market where transfer fees vary between banks. Retailers pay less to process digital rouble payments than they do for debit and credit card transactions, and this could eventually lead to lower prices for consumers if shops pass on the savings. Russia also highlights the potential for “smart contracts,” which allow payments to be triggered automatically when certain conditions are met, such as paying a supplier the moment goods arrive at a warehouse. This kind of programmable money could improve logistics and business operations. Russia is also exploring ways to connect its digital currency with those of other countries, potentially allowing it to bypass international systems like SWIFT and Visa or Mastercard. A central bank digital wallet accessible through multiple mobile banking apps may also help reach people who struggle with traditional banking services. These benefits are genuine, but they come with significant trade‑offs.
One of the most serious concerns is the level of financial visibility the system gives the state. All digital rouble transactions pass through the central bank’s platform, allowing the government to see complete transaction histories, monitor payments in real time, and analyse detailed behavioural patterns. In contrast, China’s digital currency includes a system of “controllable anonymity,” where small transactions are partially private. The EU’s digital euro plans include offline payments that would be almost as private as cash. Russia offers no such privacy protections.
Another concern is the potential for financial control. Digital money can be programmed, which means it could theoretically be used to impose spending limits, restrict purchases in certain areas, create money that expires after a certain time, issue automatic fines, apply targeted taxes, or freeze funds instantly. Russia does not currently use these features, but the software architecture makes them easy to introduce and implement.
The digital rouble also poses risks to the banking system. People may move money out of their bank accounts and into their digital wallets that sit at the central bank rather than in commercial banks. If many people do this, banks could lose deposits and face liquidity problems, which is how bank runs begin. The EU plans strict holding limits to prevent this, and China uses tiered wallets with balance caps.
Another challenge is the mandatory acceptance of digital roubles. Large retailers must accept them immediately, and smaller retailers will be required to do so within two years. This creates a national payment system controlled entirely by the state. Unlike China and the EU, Russia does not support offline payments, which means the digital rouble cannot be used during internet outages or in rural areas with poor connectivity.
When comparing Russia’s approach with other countries, the differences are striking. China’s digital currency is the most advanced in the world. It is deeply integrated into everyday digital life through widely used platforms like Alipay and WeChat Pay, public transport systems, government services, and retail. It supports offline payments, programmable money, and detailed tracking of spending patterns. It is technologically sophisticated but also highly controlled.
The EU’s digital euro takes the opposite approach. It is slow, cautious, and focused on privacy. The EU plans to test the digital euro in 2027 and 2028, with a possible rollout in 2029.[3] Offline payments are expected to be nearly as private as cash, and holding limits will be introduced to protect banks. Basic services will be free. The EU’s design prioritises privacy, decentralisation, financial stability, and consumer protection, while Russia’s model prioritises a centralised payment system, state visibility, and control over the entire payment infrastructure.
Australia represents a different path altogether. The Reserve Bank of Australia has repeatedly concluded, most recently in 2026, that there is no strong public need for a retail digital dollar or retail CBDC.[4]
Australia already has fast, low‑cost digital payment systems, and public consultations revealed limited interest in a retail CBDC. Privacy concerns were significant, and the banking system is stable. Instead of creating a digital currency for everyday use, Australia is focusing on wholesale CBDC development through Project Acacia, which explores how digital money can improve financial markets rather than consumer payments. Project Acacia’s findings show that the real benefits of digital money lie in modernising the financial infrastructure behind the scenes, not in issuing government‑controlled wallets to citizens.
Russia’s digital rouble is thus a bold and accelerated leap into the future of money. It offers efficiency, modernisation, and new technological possibilities. However, it also creates a centralised financial system in which the state is involved in every transaction. Compared with China’s digital currency, Russia’s version is less advanced but equally centralised. Compared with the EU’s digital euro, it is far more intrusive and much less protective of privacy and financial stability.
To conclude: the global landscape of digital currency development shows that countries are taking very different paths. Russia’s digital rouble is a fully centralised retail CBDC with complete transaction visibility, raising concerns about privacy and banking stability. China’s digital currency is technologically advanced and deeply integrated into everyday life, though its surveillance potential is significant. The EU’s digital euro aims to balance innovation with privacy and stability. Australia’s decision to reject a retail CBDC and focus on wholesale development highlights the importance of considering public needs, existing infrastructure, and economic context.
These contrasting approaches show that digital currencies or CBDCs are not a single global trend, but a collection of national experiments shaped by political priorities, economic conditions, and technological capabilities.
Perhaps the time has not yet come in Australia to be concerned about total government control of one’s finances. But, as John Philpot Curran, an English 18th century politician, said: “Eternal vigilance is the price of liberty”.
Dejan Hinic is a financial and investment expert operating from Belgrade, Serbia He received his law degrees from the University of Belgrade and the University of Queensland.
Gabriël Moens AM is an emeritus professor of law at the University of Queensland where he served as the Garrick Professor of Law. He also served as pro vice-chancellor and dean at Murdoch University. He is the co-author of The Legal Right to Disobey Law, Sidestream Press, 2026.
[1] ‘Rusija uveal digitalnu rublju: Sve transakcije besplatne’. B92, 1 September 2026, at https://www.b92.net/biz/svet/vesti/263751/rusija-uvela-digitalnu-rublju-sve-transakcije-besplatne/vest.
[2] Ibid.
[3] ‘Digital Euro Countdown: ECB Sets 2029 Target for Europe’s First Digital Cash!’, Euro Pulse, 10 October 2025, at https://www.europepulse.eu/ecb-digital-euro-project-2029-launch/.
[4] ‘Australia Finds No ‘Clear Public Interest’ for Retail CBDC’, PYMNTS, 18 September 2024, at https://www.pymnts.com/cbdc/2024/australia-finds-no-clear-public-interest-for-retail-cbdc/.
