Russian President Vladimir Putin says cryptocurrencies are ‘the future’
Russian President Vladimir Putin has declared that “Bitcoin is the future of global finance” and it has the power to “destroy the New World Order.”Speaking at his annual news conference in Moscow, that ran for several hours and covered a wide range of topics, Putin said that cryptocurrency has the potential to “end the world’s dependence on the US dollar and centralized banks.”
“People are naturally suspicious as they can’t immediately see it’s underlining value because they think it’s manmade so it can’t be worth anything.”Fiat [currency] is also manmade, but people believe it has value because the banks tell you it has.”Bitcoin doesn’t need a bank to decide its value as it’s a currency for the people.”An end to central banks will destroy the dominance of the US dollar and the constant push of a New World Order through fake wars, civil unrest, and the globalist agenda. “It can free people everywhere, not just in Russia.”It is the future of global finance in a new free world.”
According to Vice, Russia has established itself as a preeminent hub for bitcoin and other emerging cryptocurrencies, launching an audacious plan to grab almost one-third of the world’s bitcoin mining network from China.Everyone from the government to private businesses is embracing blockchain, the technology which powers bitcoin, and they’re doing so at an unprecedented rate. Analysts say Russia’s sudden embrace began on June 3, 2017, when Russian President Vladimir Putin took part in the International Economic Forum in St. Petersburg.There, Putin had an unexpected meeting in the corridors of the Lenexpo Exhibition Complex with Vitalik Buterin, the Russian-Canadian programmer who created bitcoin-rival Ethereum.“After the meeting, it seemed to me that the light flicked on for him,” according to Russian economy expert Tom Luongo.
”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 the market leader Bitcoin and Buterin’s creation: Ethereum.While having less than a third the market capitalization of bitcoin ($29 billion versus $93 billion) many experts see Ethereum having a bigger future, as it has widespread applications in the financial world, allowing banks and other institutions to run smart contracts.“Right after the meeting, the government pivoted towards cryptocurrencies, and said we need to start looking into it because it might be a ground-breaking technology,” according to Andrei Barysevich, a researcher at threat intelligence company Recorded Future.
Mobile application for bitcoin operations at the first cryptocurrency exchange point in Moscow.
Russia’s pivot occurred seemingly overnight.The state development bank VEB is developing an Ethereum-based project; Russia’s billionaire businessman Boris Titov launched a blockchain project promising secure voting; the Central Bank of Russia is developing its own digital currency called Masterchain, and Burger King Russia is embracing the currency to promote its restaurants.One Russian entrepreneur reportedly applied to patent his plans to distribute “vodka that trades on the Bitcoin, Ethereum, and Ethereum Classic brand names.”
In October, Putin asked his government to create legislation to regulate cryptocurrency mining and establish legal definitions for various digital assets — a move which will give the Kremlin greater control over how this industry develops.Russian Miner Coin (RMC), a company co-owned by Putin’s internet ombudsman Dmitry Marinichev, is in the process of raising $100 million to fund the building of vast warehouses full of specialized computers that will work day and night with the sole purpose of mining Bitcoins.This gambit isn’t new to Russia as China has been dominant here for the last two years, currently mining around 60 percent of the world’s Bitcoins.
This gambit isn’t new to Russia as China has been dominant here for the last two years, currently mining around 60 percent of the world’s Bitcoins.The Middle Kingdom’s efforts have been richly rewarded: the price of one bitcoin has soared from $1,000 at the beginning of 2017 to a record high of close to $20,000 as of this writing.Russia wants to get into the game and has a competitive advantage over almost every other country in the world: Electricity in Russia is cheap and abundant — especially in regions like Siberia — making it an ideal location to run the vast computing warehouses 24/7 at little cost.
Barysevich said that with the current government-controlled electricity prices, Russia has the opportunity to make vast gains with Bitcoin. “If you have an electricity at the cost of 2 cents per kilowatt, it’s 10 times more profitable than pumping oil.”Not everyone is buying Putin’s posture, however, with some experts suggesting that Russia’s sudden interest in cryptocurrencies coincides with the latest round of U.S. economic sanctions, which even friendly economists say will deal a blow to Russia’s recovering economy.Specifically, Russia’s emboldened interest in cryptocurrencies hasn’t evaded the U.S. government.
The U.S. Treasury said in a statement that it is “aware of the reports” regarding Russia and its increased adoption of cryptocurrencies, and they are continuing to monitor “evolving trends and new potential avenues for sanctions evasion,” a spokesman for the department said.Russia’s enthusiasm for largely anonymous currencies like Bitcoin and Ethereum comes at a time when Russian financial affairs have never been more closely scrutinized.According to Marc Johnson, a security consultant, and former CIA operations officer, early indication suggests it’s mostly “sincere,” saying: “There are a lot of people in the Russian blockchain community that have a very sincere desire to see the technology succeed because of its unique capabilities.”