Russian President Vladimir Putin is critical of the centralization of power within the traditional global payment system. As a result of the war in Ukraine, much of Russia has been excluded from the international payment system and billions of the country’s reserves have been frozen. For the future Putin provides flourish a monetary system based on blockchain, the technology behind crypto.
The advantage of blockchain technology
At an event of Sberbank, the largest Russian bank, Putin spoke about the possibilities of blockchain technology.
“The technology of digital currencies and blockchains can form the basis of a new system for international payments. A system that is simple and completely safe for users. The main advantage is that it does not rely on banks or third party interventions.”
With this he seems to be talking almost directly about bitcoin. Bitcoin is a decentralized payment system in which no single entity has absolute power. If Russia chooses to keep its reserves in bitcoin, then there is no way to freeze those funds. It seems that the sanctions in particular are causing Putin to think about alternatives.
In his speech, Putin shares that he sees the sanctions as “illegal restrictions” on his country. “The existing system of international payments is expensive and controlled by a small group of countries,” said the Russian president.
National crypto exchange coming up
A few days before, the crypto news also revealed that Russia is considering setting up a national crypto exchange. On November 17, a bill was introduced in the State Duma, Russia’s lower house, to legalize bitcoin mining and the sale of its proceeds in the country.
So there are a few interesting developments going on in the area of bitcoin and crypto in Russia. Although the reporting remains of a vague level and it is not clear to what extent we should take everything seriously. That does not alter the fact that it is interesting to keep an eye on these developments. Where there is smoke, there is often fire.