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Vladimir Putin Says Russia Needs Blockchain, Cannot be Late in the Race

Last Updated March 4, 2021 5:05 PM
Joseph Young
Last Updated March 4, 2021 5:05 PM

Russian President Vladimir Putin has stated that the country needs blockchain technology and emphasized that it is important that Russia does not fall behind in the development and adoption of the revolutionary technology.

Russia Insight, which provides unique insights into the Russian market, released a video featuring a discussion between Putin and the country’s largest bank Sberbank president Herman Gref, during which Putin noted the necessity of the country, its regulators, and local banks of adopting blockchain technology.

“We need [blockchain technology]. … Stone Age has not ended due to lack of stones, but because new technologies appeared. Those late in this race will instantly, VERY FAST, be under full dependence from leaders of these processes,” wrote bitcoin investor  and expert Trace Mayer, translating the words of Putin.

Gref, who oversees the most influential financial institution in Russia, has long been an optimistic cryptocurrency and blockchain enthusiast. In November 2017, Gref stated that cryptocurrencies are a fact of our life, noting that cryptocurrencies will become an indispensable part of the global financial system.

“Virtual currencies are a natural outcome of blockchain technology. We may ban them, we may welcome them. It is trendy to urge people not to play with them. But they are a fact of our life,” said Gref , at a meeting of the Russian entrepreneurs association.

In late January, Sberbank went as far to say that the bank will likely launch a cryptocurrency trading platform in the future, to address the rapidly growing demand for bitcoin and other cryptocurrencies in the market from local investors.

Sberbank’s Head of Global Markets Andrey Shemetov said  that the bank aims to provide strategic access to all kinds of products and services investors may need to invest in the cryptocurrency market.

In the same month, President Putin told TASS, a Russian news agency, that regulations will be implemented to protect investors and facilitate the growth of businesses. He further noted that cryptocurrencies can operate as a medium of exchange and a settlement network, but expressed his concerns over the store of value aspect of it.

Similar to the viewpoint of the vast majority of bankers and government officials, Putin stated that since cryptocurrencies are not backed by anything, their value cannot be warranted.

However, the lack of intrinsic value is apparent in all currencies, stocks, bonds, assets, and commodities. The value of any asset solely depends on its supply and demand, and the market is responsible for its value. Thus, the lack of intrinsic value in cryptocurrencies is a non-issue, as the market decides, in real time, the value of cryptocurrencies in the market.

Another World Leader Joins the Call

Last week, India’s Prime Minister Narendra Modi shared a similar sentiment as President Putin, as he wrote, “disruptive technologies such as Block-chain and the Internet of Things, will have a profound impact in the way we live and work. They will require rapid adaptation in our workplaces.”

Many cryptocurrency traders, investors, users, and members of the global community expressed their optimism towards the approach of Prime Minister Modi in adopting and regulating blockchain and cryptocurrency markets.

Featured image from Shutterstock.