Ethereum: Russia’s New Oil

Since Vladimir Putin’s meeting with Ethereum creator, Vitalik Buterin, multiple cryptocurrency projects involving Russia have been announced. The latest is a blockchain research center backed by Vnesheconombank.


Russia’s embracing of blockchain technology continues to to intensify.  On Monday it was announced that state-owned development bank, Vnesheconombank (VEB), in combination with a number of government agencies are opening up a research center to study the intersection of blockchain and quantum computing technologies.

From Coindesk:

Headquartered at the National University of Science and Technology in Moscow, the centre will form part of a broader digital initiative being undertaken within the Russia government at the behest of Russian president Vladimir Putin. The government offices involved are the Ministry of Economic Development, the Ministry of Finance and the Ministry of Communications and Mass Media.

This was announced at a three-day conference in Tartarstan in which Ethereum founder, Vitalik Buterin, was a speaker.

The latest wrinkle is the Ethereum Foundation has signed a deal with VEB to assist the build out of the research center with the goal of making it an incubator for ethereum-based technologies.

The focus of Buterin’s comments were on the application of Ethereum to the public administration sphere.  This follows up and puts paid the earlier announcements of Masterchain, an ethereum-based financial messaging system.

If you haven’t gotten the memo yet as to how important the blockchain is to Putin and the Russian leadership yet, I give you the title of this conference:

Blockchain: The New Oil of Russia

These projects along with the Waves Platform, a Russian homegrown middleware platform for token generation form a core strategy for mass digitization of the entire Russian economy and administrative layer.  Remember, Waves is the platform the National Settlement Depository is using to build a trading platform for cryptocurrencies on open exchanges.

Russia is moving quickly to change the way capital flows through the country in a very big way.

Defense Against the Dark Pools

And from a geopolitical perspective, it’s not hard to see where this is going.  Russia is looking for ways to fortify its financial system from external attack either through the murky waters of foreign exchange markets or simple expulsion from SWIFT.

This is the nuclear option for the United States to bring the wayward Russians to heel.

It was last used by the U.S. with the sanctions placed on Iran in 2012. It didn’t have the desired effect of overthrowing Iran’s theocrats and it won’t make a dent in Putin’s popularity.

With the Russian economy getting stronger by the day it will be harder to muster opposition to Putin.  And therefore, there is little chance that even the nuclear option will have all that much impact.

There have been reports of at least two Crimean banks that have been cut off from SWIFT.  And, if things in the White House continue to deteriorate back to neoconservative status quo, expect expelling Russia from SWIFT to be put on the table in the next few months, certainly in time for the Russian elections.

I doubt it will be successful but with looking like Trump ceding foreign policy to the neocons and the military, it won’t matter if it won’t work.  When has that ever stopped these people?


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One thought on “Ethereum: Russia’s New Oil

  1. This is fascinating. I’ve been waiting for Crypo’s and Blockchain tech to make it to the ‘commercial sphere’ for a while. I thought it may be Japan, or at least the U.$., but to see Russia is the first to dip their toes in the water is actually rather inspiring.

    Looking forward to your next article on what Russia is doing in the financial and tech sphere. Very interesting.

    Like

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