Unless you live under a rock, there’s a high chance that you’ve heard of the biggest issue in diplomatic relations right now. Russia has launched a full-scale attack against Ukraine, which targeted essential sectors such as military bases and airports. The reason behind this is apparent “de-Nazification” and long-lasting tensions between the territories. We won’t go too much into the details but this decision was met with disgust by global leaders and citizens alike. The attacker is expected to face sanctions of the harshest degree in almost every aspect, including economic. Major transactions coming into the country may be frozen, crippling their financial capabilities. Can a decentralized money system like crypto be the solution for Russia?
Some may be very optimistic about this. After all, Russian President Vladimir Putin was able to briefly meet with Ethereum founder Vitalik Buterin in 2017, discussing how cryptocurrency can work hand-in-hand with the country’s systems.
However, the country exercises an understandably higher degree of control over everything it governs. That includes financial systems. As it appears though, cryptocurrency’s founding reasons of decentralization and peer-to-peer transactions are contrary to the very principles that the country abides by. There is reason to believe that the country’s leaders would be appalled at propagating the use of a free currency, even considering their current situation.
Just last month, the Central Bank of Russia (CBR) proposed a full ban on crypto, stating volatility and its possible impact on the state’s energy supply. They went on to further explain that regulation is important and is a necessity in every system to keep it running efficiently. As expected, many of the country’s citizens oppose this view since it is the third-largest country in bitcoin mining.
While that stance was recent, it was publicized before all of this. It won’t be surprising to see Russia do a full 180 if it keeps them afloat but we’re sure that they’ll do their best to regulate it anyway. These methods can include choke points where cryptocurrencies are converted into cash (such as banks), the use of CBDCs, or other less known means.
Again, we ask the question: can crypto save Russia from its current predicament? While the answer will be different no matter who you ask: one thing is true. Technology develops rapidly, even more so in cases where there is desperation. There’s also a matter of the willingness to let go of past stances on certain matters. It is up to Russia now to play the crypto game, and for its rivals to figure out countermeasures to prevent it.