According to the leading Russian news organization Russia Today (RT), Russia will pass a Bitcoin ban within the next year, and it could happen as soon as the current parliament session.
Deputy Finance Minister Aleksey Moiseev told journalists in Moscow: “We will discuss this law in the current session of parliament, and possibly even pass it then, or at the very latest by spring next year. We are currently dealing with comments from the law enforcement agencies, about the specifics of legal measures, and we will take their remarks into account. But the overall concept of the law is set in stone.”
Strangely, Moiseev claims he is “following Europe’s lead” in this impending ban, yet Europe has never banned a digital currency, and the Bank of England just spent two sections of their famous Quarterly showing a higher understanding of Bitcoin, and even lauding the virtues of Bitcoin to the public.
The overall idea of the ban is to thwart the potential use of the currency in funding terrorism, buying illicit goods and rendering illicit services and money laundering. In other words, all the things Russian fiat currency has been used for since the inception of all currency. Russia has not been a hotbed of Bitcoin use. This is after the Peoples Bank of China has put pressure on the individual banks of China to close accounts that deal in Bitcoin.
This would make Russia the 3rd country to officially attempt a Bitcoin ban, the others being Ecuador and Bolivia. Ecuador is looking at creating its own digital currency, along with Mexico, and this merits the ban as the copy would rather not compete with the original in the future. It would appear competition and any nation’s “sovereign currency” do not go together, as far as governments is concerned.
The hypocrisy of this ruling by the Russian parliament is as impressive as it is foolhardy. Russia and China have long hated the rule of the U.S. Dollar as the world’s reserve currency, and Russia’s Vladimir Putin would like to kill the dollar. Putin has boldly led Russia into the BRICS Development Bank, an IMF competitor, along with China, Brazil, South Africa, and India, back in July. This was done to build a future path out of reliance on the U.S. Dollar by the major nations of the world who abhor the tyranny of the U.S., and dollar-run factions like the World Bank and IMF, which leverage the dollar’s power worldwide.
Russia and China have developed multiple bilateral trade agreements between each other, meaning they don’t perform international monetary transactions in the global reserve currency. Turning their back on the way to digitally transfer funds globally in the world’s first global currency, as another way to bypass the U.S. Dollar, seems short-sighted at best, wrong-headed at worst. Since the Russian Ruble will not be the global reserve currency anyway, any currency that facilitates transfers out of the Dollar, and to countries of choice should be applauded as a means to an end by Russia, in their own economic interests.
Granted, no currency is used for illegal means more than the U.S. Dollar, but the Ruble is widely used for illegal means as well, bearing a strong contradiction by this ruling, since no one is banning the Ruble or any other fiat currency. To mislabel Bitcoin as more prone to illegal use than the Ruble, or any fiat currency, is cutting off your nose to spite your face. Bitcoin could be a great boon to Russia, and it’s economic future, if they think progressively, and not fear currency’s digital future.
This is reminiscent of the story of “The Red Flag Acts” in Greta Britain, circa 1865, speaking of “following Europe’s lead.” History shows that Great Britain, not Germany or the United States, was the leader in automotive technology in the 19th century. And just as the automobile was beginning to go mainstream, it was effectively banned by government regulation via the oppressive “Red Flag Acts.” The Red Flag Acts forced owners to have a three-man crew to operate an automobile thereafter. A driver (usually the owner), an on-board engineer, and a man with a red flag at least 55 meters ahead to act as a navigator. Understandably, this caused the automobile, or “self-propelled vehicle” to be feared by the walking public, and be cost-prohibitive to the owners of early cars, requiring a full staff just to drive them legally.
The point is the automobile was the future of motivation and travel, and Britain chose to impede the industry domestically, and hand over the greatest invention to date to the Germans and Americans, who used it to build their economies to heights never before seen. All out of fear and ignorance, while shutting down economic foresight and curiosity. Obviously, the UK learned the error of its ways, and use the automobile extensively to this day. They just never profited from the largest industry of the 20th century. Trillions of dollars in jobs, infrastructure, and engineering were lost, based on simple fear of the unknown.
Appreciating the fact that Russia doesn’t want to be a leader, but a follower, it seems Russia doesn’t know who to follow. They use Europe as a brand name, but model economic policy after the 3rd-world government of Bolivia? At least Ecuador has the guts to welcome the technology into their nation as a form of the national currency. They foolishly think they can easily and effectively knock-off Bitcoin’s Blockchain on a national scale, but at least they’re on the right path, economically. Fiat currencies worldwide are dying a slow, agonizing death. At least Ecuador has the guts to step into the future from a position of strength.
Here’s a suggestion to Russia: Learn from Europe’s leadership or lack thereof, and their legislation against the automobile, back in 1865. Don’t govern out of fear, and join the rest of the world in the 21st century. It seems as if they would rather travel back into the 19th century, and cede “The Future of Money”, and it’s associated economies of scale, to the rest of the world.
You know what they say about those who fail to learn from history.
Photo courtesy of de.wikimedia.org & https://wynalazki.slomniki.pl. Featured images from Shutterstock.
Last modified: July 3, 2020 11:26 AM UTC