A Putin Aide Is Eyeing Cryptocurrencies to Beat Sanctions, Report Says

[Hydrogen]

An adviser to President Vladimir Putin said cryptocurrencies may help Russian banks avoid international sanctions, the Rambler News Service reported Tuesday.

Sanctions against Russia have created an “objective need” for the digital currencies, Sergei Glazyev told a meeting of the presidential administration on the legal status of such instruments, according to Rambler. Glazyev also argued that the government could use cryptocurrencies to make and receive payments around the world for “sensitive” services, it said.

Russian officials have grown increasingly nervous about a possible expansion of U.S. sanctions early next year in retaliation for alleged Kremlin meddling in the 2016 presidential election, which Russia has denied. Virtual currencies such as bitcoin, which has soared in price this year amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.

Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.

Glazyev, who’s himself under U.S. and European Union sanctions for his role in the 2014 annexation of Crimea from Ukraine, isn’t always in the mainstream of Kremlin policy making and has suggested in the past that Russia should liquidate its dollar reserves. He advocated creating a digital ruble based on the blockchain technology behind cryptocurrencies at Tuesday’s meeting, according to Rambler.

https://www.bloomberg.com/news/articles/2017-12-12/putin-aide-eyes-cryptocurrencies-to-beat-sanctions-rambler-says

....

I would be interested to know how compelling people find this news story.

Paper fiat is much less traceable than bitcoin and likely a far better option for illegal activities than bitcoin or crypto currencies are.

It is known that the united states military routinely "loses" billions of dollars in fiat & billions in military hardware all of the time:

$45 Billion in Tax Dollars Goes Missing in Afghanistan

Hundreds of millions of dollars are missing in action in Afghanistan, and auditors are blaming the Pentagon’s flawed accounting practices for the problem.

A new report from the office of John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR), revealed that there’s virtually no way to know what happened to a large chunk of money the Defense Department spent in Afghanistan before 2010.

http://www.thefiscaltimes.com/2015/04/01/45-Billion-Tax-Dollars-Goes-Missing-Afghanistan

Somehow I could never imagine something similar happened with crypto.

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.

[GreatMurphy]

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.
   

It baffles me as well. it seems, like this is the agenda to portray the cryptocurrencies in the most shady way possible.

[squatz1]

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.
   

It baffles me as well. it seems, like this is the agenda to portray the cryptocurrencies in the most shady way possible.

I mean when you think about it, it's a pretty smart way to try to delegitimize Bitcoin -- because if they can paint it as this crazy online currency that only does drug, gun, etc transcations then the public would be fine with banning it -- as they would simply think that it is a parasite to the world leeching off of drug users and hiding.

Cash is what people use to buy this stuff, it's easy enough and you have ZERO chance of getting caught just by using it (minus the in person risk)

So yeah, this is what governments do -- expected.

[50ouncebrew]

I heard that the Russian government is investing a lot into the development of Ethereum because it's founder is Russian.

[BrewMaster]

they may be considering some other cryptocurrency that they are making on their own. a new one not bitcoin.

because they can not use bitcoin and the article doesn't seem to focus on bitcoin either.
they can't use bitcoin because of what you said about bitcoin not being anonymous but also because bitcoin is not that big yet! when we are talking about sanctions we are talking about import export for instance and that is a lot of money, it can not go through bitcoin because they should own a large amount of it already and that is not yet possible.

also when we are talking about sanctions we are talking about for example importing goods from another country or selling (exporting) to one. if that other country does have relations with your country, they don't mind what currency is being exchanged so you don't need bitcoin. and if they don't have any relations with your country then doesn't matter what currency you use they don't have any relations with you!

[Kakmakr]

I heard that the Russian government is investing a lot into the development of Ethereum because it's founder is Russian.

If this is true, then they will not use Ethereum for that purpose. They would use the technology that are in competition with Ethereum. I would much rather go for a 100% annonymous Alt coin like Monero, if I wanted to do something like that.

Governments have been side stepping sanctions for many years, without the use of Crypto currencies. Why would it be any different now? They send physical Fiat money to a country that are not sanctioned and these countries "clean" the money for them.

[Kingofbitcoin12345]

Considering that Russian government will implement the used of cryptocurrency other than fiat,, then it is more advantageous to us in crypto community but as I have heard this is maybe a continuous marketing by Russia on creating they’re own digital currency.. I will not point out the us military financial wastage because it is already known by the world.. So let just wait and see how this become materialize..

[pugman]

An adviser to President Vladimir Putin said cryptocurrencies may help Russian banks avoid international sanctions, the Rambler News Service reported Tuesday.

Sanctions against Russia have created an “objective need” for the digital currencies, Sergei Glazyev told a meeting of the presidential administration on the legal status of such instruments, according to Rambler. Glazyev also argued that the government could use cryptocurrencies to make and receive payments around the world for “sensitive” services, it said.

Russian officials have grown increasingly nervous about a possible expansion of U.S. sanctions early next year in retaliation for alleged Kremlin meddling in the 2016 presidential election, which Russia has denied. Virtual currencies such as bitcoin, which has soared in price this year amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.

Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.

Glazyev, who’s himself under U.S. and European Union sanctions for his role in the 2014 annexation of Crimea from Ukraine, isn’t always in the mainstream of Kremlin policy making and has suggested in the past that Russia should liquidate its dollar reserves. He advocated creating a digital ruble based on the blockchain technology behind cryptocurrencies at Tuesday’s meeting, according to Rambler.

https://www.bloomberg.com/news/articles/2017-12-12/putin-aide-eyes-cryptocurrencies-to-beat-sanctions-rambler-says

....

I would be interested to know how compelling people find this news story.

Paper fiat is much less traceable than bitcoin and likely a far better option for illegal activities than bitcoin or crypto currencies are.

It is known that the united states military routinely "loses" billions of dollars in fiat & billions in military hardware all of the time:

$45 Billion in Tax Dollars Goes Missing in Afghanistan

Hundreds of millions of dollars are missing in action in Afghanistan, and auditors are blaming the Pentagon’s flawed accounting practices for the problem.

A new report from the office of John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR), revealed that there’s virtually no way to know what happened to a large chunk of money the Defense Department spent in Afghanistan before 2010.

http://www.thefiscaltimes.com/2015/04/01/45-Billion-Tax-Dollars-Goes-Missing-Afghanistan

Somehow I could never imagine something similar happened with crypto.

TL;DR
Russians are some what assholes,they keep on changing their decision and just cannot stay on one decision. Wait for some more time and see what Russia has got to say.. They will find an "alternative". Yeah.. Don't know bout Afghanistan but for a country like them they need to be careful bout their financial reserves and check on expenses regularly.
And money has been lost in crypto,remember when people bought bitcoin back in the day and now they don't know where they kept it.

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.

Hey,media says bullshit all the time,that's their basic job. They say shit without knowing shit and people believe in that shit. #Flabbergasted.

[Mometaskers]

Well, this could be another smear campaign by the elite-controlled media. Ever notice that every time there's a rally, they start yelling "Bubble!" and then stories about Bitcoin being used for buying drugs and for money laundering resurfaces?

Back to Russia, if they're not going to use Bitcoin it's possible they'd try to secretly make their own crypto and manipulate the price.

[iram1011]

An adviser to President Vladimir Putin said cryptocurrencies may help Russian banks avoid international sanctions, the Rambler News Service reported Tuesday.

You think this isn't happening?

The main market for cryptocurrencies(not exclusively Bitcoin) is still dark market or in other words illegal transactions(nicely being called "sensitive" here). There wasn't a need for official announcement. It was quite obvious. But yeah, people used to think that only general public is involved in this dark market stuff. This article would help them to understand that government officials and bankers are the ones doing illegal transactions and money laundering whether through fiat or cryptos.

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.

Get out of Bitcoin, it isn't really anonymous unless you use mixing services. Media only knows Bitcoin properly(that also I doubt) and is not much concerned about altcoins. We have some perfect privacy coins in the market like ZCASH, ZENCASH and you would have noticed how the demand of these coins rose tremendously and are still the best bet when it comes to investment in altcoins.

Why you think there is demand for privacy coins?

Because utility="Sensitive trade"

[exstasie]

An adviser to President Vladimir Putin said cryptocurrencies may help Russian banks avoid international sanctions, the Rambler News Service reported Tuesday.

Sanctions against Russia have created an “objective need” for the digital currencies, Sergei Glazyev told a meeting of the presidential administration on the legal status of such instruments, according to Rambler. Glazyev also argued that the government could use cryptocurrencies to make and receive payments around the world for “sensitive” services, it said.

I would be interested to know how compelling people find this news story.

Paper fiat is much less traceable than bitcoin and likely a far better option for illegal activities than bitcoin or crypto currencies are.

It's not an unreasonable suggestion. There's already been a lot of talk about this with regard to North Korea. If cryptocurrencies go mainstream (and that appears to be the trend), then well-placed shell companies and Bitcoin could likely circumvent a good deal of sanctions. Yes, it's traceable, but in most cases this would only become known after the fact. In the meantime, irreversible payments are irreversible. Then a game of whack-a-mole can continue via shell companies. Lightning channels and Tumblebit will add a new element as well. Otherwise, there's Monero.

Somehow I could never imagine something similar happened with crypto.

I think it depends on the network value in question. If parties can instantly send/receive billion dollar irreversible payments in a liquid asset, governments will adopt it no matter what. If you think about it, using crypto to avoid sanctions isn't so different than using it to facilitate the drug trade. Yes, privacy is a bitch with Bitcoin, but it can be done right.

[LeGaulois]

It may be just to stress other governments and institutions to show they are not ready to leave. Because if it's true I don't see why they publish this to the public. If it turns out to be true and Russia starts to use Bitcoin, be sure to see the other governments and media shouting again how Putin is a bad guy

[iamTom123]

Fiat seems like the best option for anything illegal, it is strange to me how the media continues to claim bitcoin transactions are anonymous or untraceable when the open ledger design of its system suggests the opposite.

It baffles me as well. it seems, like this is the agenda to portray the cryptocurrencies in the most shady way possible.

Of course, these people have a clear agenda and that is to paint a very different picture -- a darker and not so desirable image -- for Bitcoin so that those authorities in the government will think twice in dealing with Bitcoin. In fact, this kind of connection many are assuming to be true, is what drives many government to doubt Bitcoin of what it can do to their economy and politics. They see Bitcoin as a way for the people to get empowered and for them to one day detach from the government. Though this can be a big possibility, the scenario can be extremely flawed because Bitcoin and cryptocurrency  and the government can be partners for the good of the citizens and the economy. This is shown with how Japan is treating Bitcoin successfully.

[Granxis]

I wondered why the price of Etherum was so high, I did not know it was the effect of Russia and Putin. I think Russia and China are using Etherum against Bitcoin. I do not think Putin will miss this opportunity.

[SamReomo]

First of all, I am very sure that they are trying their best to create the digital version of their own currency "rubble" or something similar to it. They aren't trying to blame or downgrade Bitcoin, but are considering it as a great idea.
secondly, I think that the Russia's president, and his advisers are smart enough to notice that the cryptocurrencies are awesome instruments. And, they know that the digital currencies allow them to do the dealings anonymously without any sanctions from other countries particularly U.S. If I am not wrong then their main aim is to avoid sanctions related to the stuff that they can purchase with the help of Virtual currencies, and they are smart enough to consider sending and receiving of money in the form of digital currencies.
It is their first step towards crypto-world, and I am very sure that they are already working on their own version of a digital currency which they might release and legalize in their country very soon.

[buwaytress]

I would be interested to know how compelling people find this news story.

Paper fiat is much less traceable than bitcoin and likely a far better option for illegal activities than bitcoin or crypto currencies are.

It is known that the united states military routinely "loses" billions of dollars in fiat & billions in military hardware all of the time:

It would depend a lot on the architecture they're using. It's not clear if this is going to be a Bitcoin attempt or just an all-covering cryptocurrency bid. If it looks more like Monero than Bitcoin, it may very well achieve its targets of avoiding sanctions. In fact, it may not even be blockchain-based, if any of the so-called third generation cryptos being developed are to be taken seriously. I doubt anyone in that space knows very much about crypto, or if, like North Korea supposedly trying to bypass sanctions by hacking Bitcoin, their knowledge is misguided.

All the same, an aide's idea is hardly any indication of government policy. Russia's been firmly focused on looking inwards in defiance of economic sanctions, or outwards towards new allies, so perhaps they no longer need to go around them.

[figmentofmyass]

I would be interested to know how compelling people find this news story.

Paper fiat is much less traceable than bitcoin and likely a far better option for illegal activities than bitcoin or crypto currencies are.

It is known that the united states military routinely "loses" billions of dollars in fiat & billions in military hardware all of the time:

It would depend a lot on the architecture they're using. It's not clear if this is going to be a Bitcoin attempt or just an all-covering cryptocurrency bid. If it looks more like Monero than Bitcoin, it may very well achieve its targets of avoiding sanctions.

maybe some years out, but at this point, there is no liquidity in the XMR market. it is far too illiquid to be relevant to state actors or their proxies. in fact, i think people are writing BTC off too easily here.

the thing about blockchain analysis is that it takes place after the fact. western governments and their consultants like chainalysis/elliptic can flag addresses and wallets suspected of association with sanctioned russian activity. but it's a game of cat-and-mouse. if a newly registered latvian or moldovan shell corporation provides you a fresh BTC address for payment, what's going to stop that money from being funneled to sanctioned entities?

I doubt anyone in that space knows very much about crypto, or if, like North Korea supposedly trying to bypass sanctions by hacking Bitcoin, their knowledge is misguided.

i thought the idea was that north korea was attempting to hack south korean exchanges and services to accumulate bitcoin, which could then be used to circumvent sanctions.

how is this so different than marijuana companies in the US turning to bitcoin because of their inability to get reliable banking partners? sanctions are largely enforced at the level of financial institutions.