Russia’s Anti-Drone Internet Blackouts Are Driving a Cash Comeback

Russians are pulling more cash from banks, partly because of mobile internet outages, the country’s central bank has said.

The shutdowns, intended to defend against Ukrainian drones, have disrupted mobile payments, messaging apps, delivery services, and ride-hailing platforms, underscoring the economic fallout from Russia’s wartime security measures.

Cash in circulation rose by about 200 billion rubles, or $2.5 billion, in June and then by the same amount again in July, according to a report from the Bank of Russia issued Monday.

The central bank said this year’s demand is “slightly higher than in previous years” in part due to “the desire of the population and businesses to form a reserve of cash for settlements” amid the shutdowns, which are meant to disrupt GPS and cellular networks through which drones can be controlled.

Vladimir Gutenev, a senior Russian lawmaker, told a pro-government media outlet that people should always have cash to pay for products and services.

“You shouldn’t become a ‘hipster’ who lives only in the center of Moscow. Life isn’t limited to comfort,” Gutenev said.

Outages have surged in recent months, from 69 incidents in May to 662 in June and 2,099 in July, per Na Svyazi, an independent monitoring group.

Kremlin spokesman Dmitry Peskov has described the outages as protection from “dangerous neighbors.”

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Anastasiia Kruope, assistant researcher for Europe and Central Asia at Human Rights Watch, told Business Insider that more Russians were signing up for broadband internet, rather than trying to rely on cellphone data, because of the outages.

Shops that use WiFi can process payments, but there are “challenges for smaller shops” that rely on mobile data, she added.

Kruope said taxi drivers in some Russian cities have had to park in spots where WiFi is available to contact customers and download their routes in advance.

“It’s already turning into a big problem for quite a few service providers who are tied to the availability of the mobile internet, in particular,” she said.

Russia has been advancing plans for a “sovereign internet,” testing infrastructure that would allow the government to disconnect the country from the global web and control online access.

The wave of internet shutdowns began when Russia cut access across several regions, including Moscow, during its May 9 Victory Day celebrations.

A few weeks later, Ukraine launched its “spider web” drone attack, in which it smuggled drones into Russia by truck and launched them to inflict devastating damage on parked warplanes.