Russian Business Daily Calls Russia to Embrace Cryptocurrency

News and Analysis

Pavel Cherkashin, an angel investor and a partner at Vestor.In Partners, wrote an article for Russia’s most popular business newspaper Vedomosti. There he describes cryptocurrency in general and points out lots of its advantages as compared to the traditional banking system.

Cherkashin stated that, according to expert opinions, at least 10% of the global GDP will be covered by cryptocurrencies.

Describing the traditional banking he wrote:

“Traditional banking system is simply not design to service a global army of independent specialists. A remittance is worth $10 to 20 in average. It makes no sense for a $1 transaction. Transaction fees ‘eat out’ several billions of dollars every year.”

Then, having described the basics of bitcoin mining, Cherkashin stated:

“Using cryptocurrencies is the only way for financial industry in the next decade. Banning it in modern society is even more difficult than creating ‘your own internet’.”

Russia is known for its controversal policies in regard of cryptocurrencies. While local regulators admit that bitcoin’s underlying technology, the blockcain, may be quite useful and deserves further consideration, they even came up with the idea of making cryptocurrency operations a punishable crime.

However, recent tidings have made a mess of the situation, as the Russian parliament, the State Duma, has passed the draft law on ‘money surrogates’ in the first reading. While many had concerns that the law will effectively ban cryptcurrency in Russia, it actually de-facto exempted usage of virtual currency from administrative liability, and actually legalized it.

Many Russian officials made statements which expressed hostility to the very idea of money issued by a decentralized network instead of a government.

Concerning the matter, Cherkashin wrote:

“If you can’t beat the process, you should lead it. Governments of the EU were the first to realize it. Then those of the U.S. and China joined them. Computational capacity of bitcoin network exceeds capabilities of every global computer corporation. It continues growing so fast that will become the world’s biggest distriubuted network. Cryptocurrency is but a tip of a digital iceberg that will disrupt the global economy.
“And what does Russia do in that situation? That’s right, it bans cryptocurrencies. China buys Russian power to create a strategic advantage over the USA. USA in their turn develop cryptocurrency technologies and create a distributed economy on their basis, while Russia becomes a passive consumer losing the opportunity to use its own resources with high added value.”

Vedomosti that had published the article in question is among the most popular and respected business-related publications in Russia.

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