While on one level it feels silly to talk about cryptocurrencies in Russia when there is a literal war going on, this is a crypto site.
In that context, some very interesting developments have come out of Russia over the last day. Russian Prime Minister Mikhail Mishustin declared cryptocurrencies could be a “safe alternative” for cross-border payments.
“We need to intensively develop innovative areas, including the adoption of digital assets. This is a safe alternative for all parties that can guarantee uninterrupted payment for the supply of goods from abroad and for export.”
It is also worth mentioning that this announcement comes on the back of Iran’s trade ministry approving crypto as a means of payments for imports. Iran has essentially been cut off from the global banking system as a result of its nuclear programme, which has led to countries placing sanctions on the nation.
Russia, of course, is no stranger to sanctions themselves. Following their invasion of Ukraine in February, the Western World pushed back by instilling a bevvy of economic sanctions, hoping to suffocate the Russian economy and tear the value of its ruble currency down.
This brought up what can at times be a polarising subject – the use of crypto as a potential medium to evade such sanctions. These comments by Mishustin referring to crypto as a “safe alternative” will do nothing to dampen that debate.
But it does demonstrate the power of crypto. I saw this first hand in my trip to El Salvador last month, where people spoke of the advantages Bitcoin offered regarding remittances. El Salvador is in the top 10 countries in the world for remittances as a portion of GDP, and the average fee on such remittances is a crazy 6.5%.
Cutting these fees out through using Bitcoin can be a huge plus to those receiving money from loved ones abroad. In Russia and Iran’s case, while remittances will be aided too, they are not as big a factor as they are for El Salvador. In their cases, the massive boon is the enhanced ability to evade sanctions.
So while this story shows some of the pluses of crypto, it also highlights the moral grey area.