Why Is The Kremlin Suddenly Obsessed With Cryptocurrencies

Why is the kremlin suddenly obsessed with cryptocurrencies

Faunus binary option signals

In early June, Russian President Vladimir Putin attended the annual St. Petersburg International Economic Forum. The headline moment at the event was a wide-ranging and at times combative interview with Megyn Kelly.

Why Is the Kremlin Suddenly Obsessed With Cryptocurrencies?

But Putin quietly made news in another wayhe signaled an official volte-face on the issue of cryptocurrencies, digital financial instruments such as bitcoin.

As recently as a year ago, the Russian government had threatened to jail users of bitcoin for up to seven years. The Kremlin had also toyed with the idea of creating its own digital currency to compete with bitcoin. Many observers speculated that Russia would then make all other digital currencies illegal to force adoption of its coin.

But sometime last year, something changed. Perhaps the Kremlin realized that creating a proprietary digital ruble defeated the purpose of having a dispersed-ledger digital currency.

China & Russia about to release Gold-backed Crypto

Possibly they observed the huge sums of money being poured into blockchain technology by Silicon Valley, and resolved to make sure Russia didnt get left behind when the technology became popular.

(The blockchain is essentially a ledger with thousands of copies that gets updated every time a transaction takes place.)

Or maybe they just woke up to the vast array of possibilities that cryptocurrencies could offer in the service of money laundering.

Putinand the rest of his oligarch friendshave a problem.

Why Is the Kremlin Suddenly Obsessed With Cryptocurrencies? – Daily Beast

The Magnitsky Act, which established strict sanctions on named Russian citizens, and the Russian hacking scandal currently consuming American politics, have woken up governments to the colossal amount of ill-gotten Russian cash being invested within in their borders.

Many countries, including France, Switzerland, Ukraine, and Poland, have launched investigations into Russian money passing through their banking systems, while others, such as Cyprus, Greece, and China seem to still be looking the other way.

In March, the Organized Crime and Corruption Reporting Project published a study entitled, The Russian Laundromat Exposed, revealing the vast and complex banking mechanisms that oligarchs use to skirt international financial controls.

From Putins perspective, the solution to this dilemma could be cryptocurrencies. And the Ethereum platform (which is based on the blockchain model) appears to be the Russians digital currency framework of choice.

Ethereum allows clients to create their own digital smart contracts which can have a multitude of uses that transcend mere currency applications. Using Ethereum, for example, a startup recently raised nearly $4 million in an initial coin offering (think IPO) to begin manufacturing zirconium in Magnitogorsk, Russia.

Why is the kremlin suddenly obsessed with cryptocurrencies

Each ZrCoin, issued by the company represents 1 kilogram of synthetic zirconium.

At a forum in Moscow in April, a Russian politician named Andrei Lugovoi sang the praises of the blockchains versatility. He cited a World Bank study predicting that 10 percent of world GDP would be stored with the help of the blockchain as early as this year. He also said he expected a draft bill in the Russian Duma on regulation of cryptocurrencies would be made public in the second half of 2017.

If Lugovois name sounds familiar, its probably because he was one of two men implicated in the 2006 death of Russian spy Alexander Litvinienko in London, via radioactive polonium-210 poisoning.

A former KGB officer himself, Lugovoi is now an MP in the far-right LDPR party. Hes also deputy chairman of the Duma committee on security and anti-corruption.

Last year, Lugovoi told a conference that blockchain-based currencies could become the best way to get around U.S.

Why is the Kremlin Suddenly Obsessed With Cryptocurrencies?- via Bill Browder tweet

and EU sanctions. This is is [sic] a rare situation where the sanctions policy of the West gives rise to the opportunity for homegrown business to create something new and allow the national economy to move forward, Lugovoi said, according to Newsweek.

And the Russian blockchain community is indeed growing.

A conference held in Moscow in May attracted hundreds of people; another is planned for September. And a group of banks working under the supervision of the Russian Central Bank is currently testing a proprietary Ethereum-based masterchain.

Why is the kremlin suddenly obsessed with cryptocurrencies

Not only that, but Russias largest online retailer, Ulmart, is expected to begin accepting bitcoin in September. And another politician suggested setting up a Crypto Valley on the Crimean Peninsula to raise regional funding in the part of Ukraine that Russia annexed in 2014.

At the St. Petersburg forum, Deputy Prime Minister Igor Shuvalov enthused that Putin had caught the digital economy bug, and that the president had attended a small closed working group on the subject in which he kept them talking about the technology well past midnight. Putin even met privately with the founder of Ethereum, 23-year-old Canadian-Russian Vitalik Buterin on the margins of the conference.

Get The Beast In Your Inbox!

Start and finish your day with the top stories from The Daily Beast.

A speedy, smart summary of all the news you need to know (and nothing you don't).

Subscribe

Thank You!

You are now subscribed to the Daily Digest and Cheat Sheet.

We will not share your email with anyone for any reason.

Its no surprise Putin is excited. Even Ethereums most ardent supporters will admit that once money is in the cryptocurrency loopthat is, after its been exchanged for fiat moneyits devilishly hard to track, by design. Cryptocurrency transactions are anonymous, dont respect national borders, and are now nearly instantaneous.

In theory, at least, its the holy grail of money laundering.

As I write this, the market capitalization of all cryptocurrencies is still relatively modest, just under $100 billion, approximately what shoe-maker Nike is worth.

Putin's new obsession w/Cryptocurrencies is because of his fear of his $ frozen & more

But the market is growing by leaps and bounds. Ethereums flagship token, the ether, was up 4,000 percent for the year earlier this summer.

Most cryptocurrency transactions are perfectly trackable, thanks to a distributed ledger. (That sort of verification is part the appeal.) But trackable is not attributable. And in order for financial laws to function properly, some level of attribution must be built into the system.

As more governments agree on regulatory regimes to integrate cryptocurrencies into their business, more money will flow into them.

Oligarch-sized transactions that would be difficult to impossible now will become more and more possible.

This isnt a problem in countries that operate under the rule of law. The United States and others are already working on laws and regulatory frameworks that will eventually be able to fully accommodate cryptocurrencies and take advantage of their unique properties.

Why is the kremlin suddenly obsessed with cryptocurrencies

For example, its now possible to trade bitcoin and ether as easily as yen and euros.

But what about in kleptocracies like Russia, where laws are bent and molded to facilitate, rather than prevent, corruption?

Its not hard to imagine a situation where regulations are either designed to be ignored for the benefit of certain people, or are simply toothless and thus throw the door open to all manner of illicit activity.

The Magnitsky Act has been a thorn in the side of Putin and his cronies for a long time.

But as we stand at the threshold of a new era in the world of finance, he may think hes found a way to beat it.

Follow this link:
Why Is the Kremlin Suddenly Obsessed With Cryptocurrencies? - Daily Beast

Related Post
  • What Is a Cryptocurrency?

    We Need Clearer Definitions - Coindesk - January 5th, 2020

  • Cryptocurrency Will Not Die: Mainstream Media on Bitcoin in 2019 - Cointelegraph - January 5th, 2020
  • South Korea Works to Bring Cryptocurrency Into the Mainstream - The Diplomat - January 5th, 2020
  • Chinas Dichotomy Between Cryptocurrency And Blockchain - Forbes - January 5th, 2020
  • Google lifts ban on Ethereum wallet app it thought was mining cryptocurrency - TNW - January 5th, 2020
  • Why a Technical Analyst Believes Bitcoin Cash (BCH) Will Surge by 80% - newsBTC - January 5th, 2020
  • Forget Brexit, Think Blockchain and Cryptocurrency - FXStreet - January 5th, 2020
  • Why Analysts Are Bullish On Cryptocurrency As Bitcoin Turns 11 - Ethereum World News - January 5th, 2020
  • 7 Big Bitcoin and Cryptocurrency Predictions for 2020 - The Daily Hodl - January 5th, 2020
  • Top Analyst Brands XRP a Moonshot Investment; Heres Why - Ethereum World News - January 5th, 2020
  • Ian Balina, The Controversial Face Of Cryptocurrency - Nasdaq - January 5th, 2020
  • Cryptocurrency in Arab World: Clock is Ticking, But Pace is Slow - Finance Magnates - January 5th, 2020
  • Is Cryptocurrency Inheritable?

    Yes, Here is How it Works - Bitcoin & Crypto Guide - Altcoin Buzz - January 5th, 2020

  • Upbits Stolen Ethereum Is Moving, and Its Bad News for ETH - newsBTC - January 5th, 2020
  • Bitcoin Hash Rate 8x Higher Now Than At $20,000 Top; Why Its Bullish - Ethereum World News - January 5th, 2020
  • U.S. Authorities Arrest Virgil Griffith For Teaching Cryptocurrency And Blockchain - Forbes - November 30th, 2019
  • What Hides Behind South Korean Cryptocurrency Regulation Policy?

    - The Diplomat - November 30th, 2019

  • Thailand: Cryptocurrency Law Will Change in 2020 to Stay Competitive - Cointelegraph - November 30th, 2019
  • The Cryptocurrency Market Update: Bitcoin back on recovery track, Ripple and Ethereum follow the lead - FXStreet - November 30th, 2019
  • CipherTrace Q3 2019 Cryptocurrency AML Report: 2/3 of the Top 120 - AiThority - November 30th, 2019
  • XRP and Ripple Name-Dropped on BBC Segment on Cryptocurrency - Ethereum World News - November 30th, 2019
  • Cryptocurrency Crime Spikes This Year and SMBs are Paying the Price - Commercial Integrator - November 30th, 2019
  • This Cryptocurrency Is Up 11310% in a Week.

    Why is the kremlin suddenly obsessed with cryptocurrencies

    Legit Scam or Just Legit? - CCN.com - November 30th, 2019

  • Akon has started building Akon City in Senegal with focus on cryptocurrency and renewable energy - Evening Standard - November 30th, 2019
  • $150 Billion Cryptocurrency Boom Is Here Buy This ETF to Profit - Banyan Hill Publishing - November 30th, 2019
  • Is a Cryptocurrency Derivatives Boom On Its Way?

    - Yahoo Finance - November 17th, 2019

  • 2 men arrested in elaborate plot to steal $550K in cryptocurrency by hacking social media accounts - USA TODAY - November 17th, 2019
  • This cryptocurrencys price just pumped 7,000%, but why? - Decrypt - November 17th, 2019
  • The cryptocurrency market update: Bitcoin and major altcoins pass the time in ranges - FXStreet - November 17th, 2019
  • Crypto-corruption In 2018, a major Russian cryptocurrency exchange lost $450 million in Bitcoin.

    Now, the exchange's founder is saying he transferred... - November 17th, 2019

  • Big Canadian bank rumored to offer cryptocurrency accounts, Bitcoin trading - The Next Web - November 17th, 2019
  • Switzerland gets another Bitcoin bank that holds cryptocurrency for customers - The Next Web - November 17th, 2019
  • Banning Cryptocurrency Is Not On Indian Parliaments Winter Session Agenda - Inc42 Media - November 17th, 2019
  • What Could Trigger the Next Cryptocurrency Alt Season?

    - Dash News - November 17th, 2019

  • U.S. cant let criminals get the upper hand by using Chinas coming cryptocurrency - MarketWatch - November 17th, 2019
  • China planning to reward its soldiers with cryptocurrency - FXStreet - November 17th, 2019
  • Creativity and Value Will Win the Cryptocurrency Exchange Wars - newsBTC - November 17th, 2019
  • Cryptocurrency Exchange Bankruptcies Are the Failed ICOs of 2019 - BeInCrypto - November 17th, 2019
  • Beware of cryptocurrency gurus like Dr Ruja and her OneCoin cult - Jim Duffy - The Scotsman - November 17th, 2019
  • China to reward troops with cryptocurrency bonuses - Express - November 17th, 2019
  • The cryptocurrency market update: Bitcoin and major altcoins are vulnerable to further losses - FXStreet - November 17th, 2019
  • Helium is building a peer-to-peer internet-of-things network - Fast Company - November 17th, 2019
  • Coinbase Announces its Upcoming Cryptocurrency IRA - The Merkle Hash - November 17th, 2019
  • Three Classic Coins That Attempt To Preserve Existing Cryptocurrency Features - Bitrates - November 17th, 2019
  • Cryptocurrency tracking improves -- but how?

    - FCW.com - November 9th, 2019

  • Senator Romney Considers Action As A Nation On Cryptocurrency Threat To Homeland Security - Forbes - November 9th, 2019
  • Why Is the Stellar Lumen Cryptocurrency Up 18% Today?

    Best color options windows 10

    - Motley Fool - November 9th, 2019

  • Cryptocurrency This Week: Facebooks Marcus Terms Bitcoin Not A Currency; Regulation A Must, ... - Inc42 Media - November 9th, 2019
  • Vancouver-based cryptocurrency exchange latest to shutter with millions owing to clients - Vancouver Sun - November 9th, 2019
  • Governments race to beat Facebook's cryptocurrency, libra, at its own game: Don Pittis - CBC.ca - November 9th, 2019
  • Cryptocurrency for Africa: Akon Reveals When He's Going to Launch His Own Coin - U.Today - November 9th, 2019
  • Swell the News?

    XRP Drops 5% as Ripples Flagship Event Kicks Off - Cointelegraph - November 9th, 2019

  • Why Are Cryptocurrencies Becoming a Mainstay of International Business Platforms?

    Why is the kremlin suddenly obsessed with cryptocurrencies

    - CryptoNewsZ - November 9th, 2019

  • Startup Targets Cryptocurrency Crime - But Will The Big Banks Come On Board? - Forbes - October 24th, 2019
  • Major Bitcoin Miner Warns The Cryptocurrency Needs Better Privacy - Forbes - October 24th, 2019
  • Why Cryptocurrency is in The Spotlight For More Central Banks - newsBTC - October 24th, 2019
  • Cryptocurrency Mining Hardware Market 2019-2023 | Evolving Opportunities with Advanced Micro Devices, Inc and Baikal Miner | Technavio - Business Wire - October 24th, 2019
  • Bank of Canada Warms To National Cryptocurrency, Will it Compete Against Bitcoin?

    - newsBTC - October 24th, 2019

  • Facebook's Cryptocurrency Libra Could Threaten Alipay and WeChat Pay, Tencent Says - CryptoGlobe - October 24th, 2019
  • Are Smart Cities The Pathway To Blockchain And Cryptocurrency Adoption?

    Why is the kremlin suddenly obsessed with cryptocurrencies

    - Forbes - October 24th, 2019

  • Where US Regulators Stand on Cryptocurrency - Bitcoin News - October 24th, 2019
  • Europol: Bitcoin is the principal cryptocurrency used in the dark web - FXStreet - October 17th, 2019
  • SEC puts a stop to Telegram's cryptocurrency plans in the US - Engadget - October 17th, 2019
  • Alert: IRS Releases Long-Awaited Guidance on Taxation of Cryptocurrency Transactions - JD Supra - October 17th, 2019
  • Chinas Global Cryptocurrency May Be on the Horizon - ETF Trends - October 17th, 2019
  • As Facebook's libra faces headwinds, China is racing to launch its own global cryptocurrency - CNBC - October 16th, 2019
  • Mastering Emotions and Managing Risk in Cryptocurrency Trading - Coindesk - October 16th, 2019
  • Telegram might be forced to put its global cryptocurrency plans on ice - MIT Technology Review - October 16th, 2019
  • Bitcoin Will Break Out Again in November, Suggests Cryptocurrency Trader - BeInCrypto - October 16th, 2019
  • Theres A New Question On Your 1040 As IRS Gets Serious About Cryptocurrency - Forbes - October 16th, 2019
  • An overview of Facebooks cryptocurrency supporters whos in and whos out - The Next Web - October 16th, 2019
  • Cryptocurrency market update: Bulls swinging into action, Bitcoin, Ripple and Ethereum in the green - FXStreet - October 16th, 2019
  • Another partner abandons Facebooks cryptocurrency - Marketplace.org - October 16th, 2019
  • The New Guidance on Cryptocurrency - Accountingweb.com - October 16th, 2019
  • The issuer of a star cryptocurrency is being sued for $1.4trn - The Economist - October 16th, 2019
  • Casbaneiro is a threat to cryptocurrency in Latin America - Yahoo Finance - October 16th, 2019
  • CipherTrace report: 87% of cryptocurrency trading is now traceable - FXStreet - October 16th, 2019
  • Facebooks Blockchain-Based Cryptocurrency Libra: Everything You Need To Know - Forbes - October 8th, 2019
  • Cryptocurrency: What to know about digital money - Fox Business - October 8th, 2019
  • India must note that bitcoin is much more than a cryptocurrency - Quartz India - October 8th, 2019