For weeks now we’ve been getting very mixed signals out of the Russian Government about cryptocurrencies. On the one hand we see it embracing the new technology while at the same time going on the warpath against them.
Because of that there is a lot of confusion in people’s minds as to what the endgame for cryptos in Russia looks like. I’ll try to clear this confusion up given what we know.
But, suffice it to say, this is very good news for both Bitcoin and the Russian economy. Give me a few minutes and I’ll explain why.
Vladimir Putin is very much a law and order kinda guy. If you watch Putin operate in the public arena he always does so with an eye towards the law. He believes strongly in the law. And cryptocurrencies, despite their obvious benefits to a Russian economy that needs the type of disintermediation cryptos offer, operate in a legal gray area that makes Putin uncomfortable.
So, the goal with Russian official crypto-policy is to stamp out the illegal activities – the money laundering, terrorism-financing, human-trafficking, etc. – while simultaneously using the technology to modernize Russia’s internal capital handling capabilities.
This is what the crypto-ruble is all about. It is a way for Russia and Russians to provide a gateway between the crypto-world and the so-called real one. It ensures that this new form of ruble properly tracks capital flow through the Russian economy.
By taxing crypto-rubles at the capital gains rate for those that cannot provide a paper-trail of ownership, Russia and Putin are incentivizing the development of low-cost crypto-payment systems to exchange rubles for goods only in cryptocurrencies that also track ownership, like Ethereum and others that have transparent blockchain histories.