In Russia, the use of electronic payments in both the public and private sectors in recent months has grown so fast that the Central Bank has had practically no demand for new money. Published data shows M0 growing to 3.26 trillion rubles in June 2007 from 3.07 at the start of the year. M2 figures show that almost the entire growth in the volume of money in the economy (at the level of 50 percent annually) is due to electronic payments. Indicators of the growth of turnover in retail trade in the first half of the year (14.2 percent in real terms, that is, taking account of inflation, almost 20 percent nominally) and the growth of public spending (19 percent) do not give cause to think that there is no public demand for more money. A comparison of M2 and M0 (money in circulation outside banks) shows that the share of cash in economic turnover, which has been slowly sinking since 2002, began to fall faster in 2006. it seems that a key reason for the transition to e-payments is increasing transparency in salary payments. In other words, when salaries are transparent they no longer need to be in cash. The transition is taking place on a massive scale and it reveals a “kind of paradox”, as the article puts it. The rapidly growing Russian economy, in spite of 8-9 percent annual inflation, will soon not need any more money.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]