The Wagner Group office in St. Petersburg. Igor Russak/Portal
Families of Wagner soldiers will receive about 5 million rubles (about US$60,000) if a relative is killed.
Several women told Bloomberg they were given bags of cash that they didn’t deposit with banks.
That means there may be more than $1 billion in cash currently in circulation, which could have an impact on the Russian economy.
The reparations paid to the families of dead Wagner Group combatants appear to be wrecking Russia’s wartime economy.
According to the German Marshall Fund, a payment of 5 million rubles (about $60,000) will be made to the families of mercenaries killed fighting Ukrainian forces for Vladimir Putin.
In an audio commentary released by his company Concorde last month, Wagner boss Yevgeny Prigozhin said the families received “black money” payments.
In fact, several women told Bloomberg that they went to collection points to collect the cash payments. They said they were advised not to deposit the money in bank accounts to avoid tax or other scrutiny.
Prigozhin, in a Telegram interview reported by Al Jazeera, said Wagner lost 20,000 fighters in the months-long battle for the Ukrainian city of Bakhmut that he led.
Payments for that many deaths would equate to a cash flow of 100 billion rubles ($1.2 billion) pouring into Russia’s financial system.
This may have contributed to Russia’s economy becoming increasingly cash-based. According to the central bank, the amount of cash not in circulation has increased over the last year.
This could also indicate that confidence in the stability of Russian banks is falling, especially as interest rates of 7.5% are likely to attract rising deposits.
The growing “black economy” is also reducing the tax revenue needed to fund Putin’s war.
In January, the Daily Beast reported that some families had yet to receive payments from Wagner. The outlet quoted an anonymous Wagner militant as telling Telegram channel VchK-OGPu in January that the group had not made any payments in the event of an execution or if there was “no corpse.”
The story goes on
Wagner now appears to be attempting a military coup against Putin, with British intelligence suggesting his troops would “almost certainly” invade Moscow.
Saturday’s events were followed by weeks of criticism by Prigozhin of Putin and other senior Kremlin figures. Western intelligence services believe this is because he did not receive a reward after helping to capture Bakhmut.
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