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How Western sanctions affected the digital infrastructure of Russia

Many experts predicted the collapse of the Russian economy after the imposition of major sanctions against the country in early 2022. Despite the onslaught of widespread restrictions, Russia passed this challenging test without losing much. However, the situation on the international stage remains tense, and it is unclear what new restrictions the country will face in the future.

One of the most fragile sectors of the economy, digital infrastructure has been put to some of the toughest tests amid Western sanctions. The system’s bottlenecks were exposed by this situation, which also sparked the creation its own regulatory mechanisms.

The development of digital infrastructure in Russia started in the 1990s. Three decades later, the ecosystem is yet to fully mature: a single coordinating body has not been established, and the control system has not been fully elaborated. Although the Central Bank has taken the lead in the fintech sector, there are still vulnerabilities that could prove fatal if the situation exacerbates and new attacks are launched.

Given the limited availability of Western resources today, it is more crucial than ever for the Russian economy to concentrate on domestic developments and to start building a comprehensive digital infrastructure. Can the state successfully tackle this challenge? Definitely. However, it is advisable to forge new friendly relations with allies in addition to using internal reserves.

Such attempts have been made in Russia before, but they have never reached a logical conclusion. Given the current situation, it is crucial that nothing is left to chance and that the state taps into its potential to the fullest.

Timur Ayitov, Deputy Chairman of the Commission on Digital Financial Technologies, Chamber of Commerce and Industry of the Russian Federation, offered his thoughts on the future of Russian digital infrastructure.

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