WHAT IS UP WITH RUSSIA AND BITCOIN?

Brief History

Governments of the world have always maintained policies that do not in any way support cryptocurrencies. And Russia, one of the largest countries in the world by land mass is not left out of these countries. The anti-cryptocurrency actions and policies that we experience with the Russian government today was not as a matter of fact how it used to be. Russia and crytptoccurrencies used to go hand in hand, that is if you consider the years before 2018 – emphasis on 2016 and 2017. It was always difficult to go to cryptocurrency major events without seeing Russians at the helms of affairs. As a matter of fact, Russian developers were part of the pioneers in initial coin offerings (ICOs). But now, the crypto craze is not much in Russia, and the government of the country has over the past years reiterated their stand with the Russian Central Bank rolling out policies fueled by her anti-cryptocurrency nature. But if the news that has been on the internet is anything to go by, there might just be a change in story. Now the question is; what is the news?
The news out there is that Russia is planning a huge $10Billion USD investment into Bitcoin with the aim of tackling the effects of sanctioning from the United States. But really, this news is not official as it was just a claim by a Russian economist and university lecturer; Vladislav Ginko. So this article is more of the claims of Ginko. And Ginko is not new to the cryptocurrency world by the way, he is somewhat a Bitcoin evangelist who has maintained ties with the Russian government for over 20 years. In his claim, he said that the mitigation of the sanction from the United States could be achieved through the use of Bitcoin. Recall that political unrest between the two countries (United States and Russia) has forced the Russian government into searching for another money asset. There were reports last year that the government was selling United States government debts in exchange for precious metals like gold and silver. and this had led to about 300% in their gold reserves. There has also been a rumor of talks going on between the Russian and the Chinese government on a possible collaboration in creating a payment system that is totally independent of dollars.

 

WILL RUSSIA INVEST $10 BILLION INTO BITCOIN?

Ginko claims that the investment of the Russian government into Bitcoin will be a good step towards de-dollarisation geared towards protecting Russia’s national interest. And he also said that that the initial investment of the government could be as much as $10B. Now, recall that in 2018, Bitcoin saw a drastic sell-off. This sell-off saw its market cap size reduce to $66.6B within the space of five months. If the plans of the Russian government as claimed by Ginko pulls through, the government could own 16% of the world’s Bitcoin. A buy order this big could increase the market cap of Bitcoin, which will be awesome to individual investors but I am not sure it will be the same for the whales; one of which Russia will become. First of all, an increase in value will see instant reduction of Russia’ share as more Bitcoins will be created. Also, The Russian government wouldn’t be able to run an account that will enable the buying of crytptoccurrencies. This will lead to a creation of an intermediary cryptocurrency to act as a utility token, and this intermediary cryptocurrency will probably be state owned. Can you beat that? Will Russia be willing go all the way with all these? The truth is. We know how Russia keep things like this secret till they are ready to make it public, so one cannot say for sure that Ginko’s claim is true. Besides, the Central Bank of Russia have continuously shied away all efforts to get them to confirm the news. In all of these though, one thing is certain; the Russian government is making plans geared towards de-dollarization. And Bitcoin is definitely one of the option they are considering as they have seemingly increased their holdings in other currencies like the Japanese Yen.

Be the first to comment

Leave a Reply

Your email address will not be published.


*