I was interviewed a few weeks back by David Gilbert at Vice News about Russia and its relationships to Bitcoin. My article on Russian Miner Coin caught his attention as it did a lot of folks.
That article is the 2nd best trafficked article of 2017 here. David’s article just hit the web and I suggest you read it. It presents a pretty fair view of where the Russians are and where they are going with cryptocurrencies.
It’s good to see that David not only quoted me accurately but that our whole 30 minute discussion made an impression on him.
“After the meeting, it seemed to me that the light flicked on for him” Tom Luongo, an expert on the Russian economy, told VICE News. ”This was a way to rapidly push forward Russian financial and banking services, they are now moving rapidly to effectively digitize their entire economy.”
The appeal is obvious. Not only is every major financial institution around the world pouring huge amounts of money into research in cryptocurrencies, but according to one expert, in the right conditions — and Russia has the right conditions — mining bitcoin could be “10 times more lucrative than pumping oil.”
Luongo says that Putin soon realized cryptocurrencies were not entirely dangerous, and instead offered the potential to diversify the country’s economy away from oil and gas. Russia has thus far focused primarily on Buterin’s creation: ethereum.
It’s imperative to understand that Putin has always looked towards a time when Russia would grow beyond its first-order commodity-based economy. Rebuilding that was the path he chose to rebuild Russia from the ground up after the disastrous post-Soviet period under Yeltsin.
It is this period of time, right now, where the major legislative changes are being made to set the Russian economy on a path of producing a greater percentage of higher order goods.
And if Putin’s decrees about building a legal framework for cryptocurrencies get adopted across the Eurasian Economic Union it will have the knock-on effect of making the smaller nations less susceptible to cross-border capital inflows and outflows destroying the local currency.
Cryptos being legal for doing business and settling accounts neatly gets around that problem. I discussed this at length in a post recently.
And this is what is confusing many people. They have been told that Putin is this autocratic monster who rules Russia with an iron fist when the opposite is almost wholly true. Peel back the Soros-influenced propaganda and you’ll find someone much closer to Pat Buchanan’s brand of paleo-conservatism than Joseph Stalin’s paranoid autocracy.
Putin’s natural instincts are conservative; to put the status quo first and make incremental change. So, cryptos were obviously something to distrust if it meant a threat to existing order. But, as I told David Gilbert, his talk with Vitalik Buterin changed his mind. He’s flexible and rational not the other way around.
That’s what has everyone so confused and that’s why Russia’s crypto-market will continue to evolve quickly. The wounds from the 2014 ruble crisis and hybrid war attack by the U.S. are still fresh. And they likely made Buterin’s arguments about Ethereum easy to swallow.