Russia, with all its might, is one of the most dominant countries in terms of political presence and bureaucracy. However, its significant status did not resonate economically as Russia only has the 12th largest economy. With the US being the undisputed leader in terms of economics, Russia seems to look forward to challenging the former’s hold on trade and investment with the assistance of the next big thing in the financial landscape- cryptocurrency and blockchain technology.
According to reports, Russia is not unfamiliar to the idea of cryptocurrency as the development of a Russian national virtual asset was first raised in 2015 itself, but the discussion was restricted to private sectors. The same year, the Central Bank of Russia received a proposition from two Russian payment entities namely Qiwi and Webmoney but the proposal was blatantly rejected by the central bank. However, the following year, Andrei Lugovoi, deputy of the State Duma, suggested that introduction of crypto assets would assist Russia to avoid US and EU sanctions.
It is no secret that Russia has been looking forward to breaking the US stronghold for a long time in terms of trade and investment. It was indicated that Russia’s political sector was now motivated to trade “outside” the U.S dominated financial system.
Besides, the trade sector, Russia also wanted to reduce the influence of U.S sanctions and improve its foreign currency reserves. In order to do that, Moscow has been massively prioritizing blockchain technology to implement long-term security goals and improve the country from an economic standpoint.
The sentiment towards cryptocurrency and blockchain improved considerably in Russia, and in 2017, a Russian intelligence officer stated in international blockchain conference that “The internet belongs to the Americans – but blockchain will belong to us.”
The following year, the Kremlin officials also backed Russia to develop their own national crypto assets or a blockchain-based financial system. Vladimir Putin, President of Russia, initially did not agree to the introduction of a crypto asset but with a better understanding of the technology, he conceded to carry forward the crypto revolution.
Currently, the Russian National Security Depository [NSD], has been laying down the groundwork in order to kick start the blockchain endeavors in Russia but a blockchain evolution in Russia would likely take decades before it bears impressive results. Central Banks have also stated their support towards crypto assets but it was recently claimed by Elina Sidorenko,head of the working group on cryptocurrencies at the State Duma said,
“The country lacked the legislative framework, regulatory authorities, and technical requirement to immediately combine its financial system with cryptocurrencies.”
Although there are several milestones to cross in terms of developments in the blockchain sector, the crypto ball has started rolling in Russia.