The leading business daily in Russia, the Vedomosti, a publication that pegs itself among the likes of the Financial Times and the Wall Street Journal has published an article titled “Deny or Lead the Cryptocurrency Economies”, which is also the editor’s choice at the time of publishing.
An article published by the Vedomosti on December 23 argues that Russia is missing the opportunity to embrace an economy that will benefit from a cryptocurrency and is, instead, prohibiting cryptocurrencies such as Bitcoin which is leading to Russia being transformed into a “passive consumer.”
The published article can be found here, on Vedomosti.
The article cites Bitcoin specifically, stating that the cryptocurrency has become a significant talking point among technologists and venture capital investors around the world. The author is also quick to point out that Bitcoin is also “guaranteeing” nightmares among financial and tax authorities as well as the bankers.
Citing the merits of Bitcoin – a cryptocurrency that is issued by the public through an “ingenious” digital algorithm that ensures its independence from any central authority or regulator – the author notes the remittance value of Bitcoin, wherein two people can transact with the smallest transfers and scale up to hundreds of millions of dollars, from any country to any virtual wallet. The article also details how a distributed ledger works, noting:
Each transaction is confirmed by thousands of independent servers around the world and laid in an endless chain of blocks (the blockchain), saved forever in history.
The article also notes the limitations of the current banking industry, “[a] system that is simply not designed to compete with the army of independent workers [freelancers] around the world.” Continuing about the banking industry’s remittance drawbacks, the article brings the focus on Bitcoin, a cryptocurrency that can be swapped and transferred among people a near negligible transfer charge (if any).
“Using cryptocurrency is the only way the financial industry develops further in the next decade,” the article added.
Vedomosti also points to the EU and then the U.S. and China who, the author claims, were the first state bodies to realize that if Bitcoin and cryptocurrencies cannot be ‘disabled’, then “it is necessary to lead” the new innovation and its industry.
The computing power of the Bitcoin network now exceeds the capacity of the world’s major computer and technology corporations. It continues to grow at a pace that in a few years has become the most powerful distributed computing system in the world.
The publication also points to the benefits of having a locally-based mining pool, noting that companies in Europe, US and China have joined an “arms race” of having their own operations.
Seeing the fallacy of Russia ‘prohibiting’ cryptocurrencies, the publication makes an example of China – a country buying electricity from Russia – to help with its strategic advancement in its competition with the United States.
Russia has had a tumultuous history with regulation policies concerning Bitcoin and cryptocurrencies in recent times. The Russian Finance Ministry recently proposed a 4-year ban for Russian citizens who adopt Bitcoins and transact with the cryptocurrency.
At the time, Assistant Minister of Economic Development in Russia, Elena Lashkina said:
Operations on them [Bitcoin] are speculative in nature, are carried out at so-called virtual exchanges and carry a high risk of changes in its value.
The use of surrogates, including cryptocurrency, is associated with a high level of risk.
The anonymous nature of the production of money substitutes, including cryptocurrency, [brings with it an] unlimited range of [threat] actors to create the conditions for the involvement of citizens and companies in illegal activity, including the laundering of proceeds from crime and terrorist financing.
Last year, the Deputy Chairman of Russia’s Central Bank, the Bank of Russia stated:
We advocate a careful approach to bitcoin and are monitoring the situation along with the Bank of International Settlements.
As things stand, the proposal for a harsh punishment concerning Bitcoin adopters has not been implemented by Russia.
Meanwhile, Russia’s neighbor Georgia is currently benefiting from opening its doors and welcoming Bitcoin’s best known-miner, Bitfury. The country will see an increase in local economy and employment after BitFury’s investment of a $100 million mining farm in Tbillisi, Georgia’s capital city.
Disclaimer: Quotes from Vedomosti are loosely translated.
Featured image from Shutterstock.
Last modified: May 21, 2020 10:36 AM UTC