Why is Russia so active in the crypto world?

 Mark Schwarz
  May 08, 2018

Russia, the world’s largest nation, has grabbed worldwide attention with its active participation in cryptocurrency trading and use. While cryptocurrency gained massive support all over the world right from its launch, Russia attempted to ban Bitcoins and launch their national cryptocurrency. When other countries were actively participating in cryptocurrency trading, Russia kept its distance from the cryptocurrency world and waited for the correct time to jump into the market!

The early state of cryptocurrencies in Russia

In the midst of 2017, the market capitalization of cryptocurrency surpassed $200million. Despite the fact that many countries had started accepting cryptocurrencies by then, Russia explicitly refused to endorse any kind of cryptocurrency trading.

Russian politicians, bankers, and tech enthusiasts gave contradicting statements about cryptocurrency trading. Vladimir Putin, the President of Russia, enforced strict rules on Bitcoin /cryptocurrency trading. As per the laws, punishment for seven years in jail was proposed for citizens owning Bitcoins.

The sudden spin

Understanding the demand for digital payments across the world, Vladimir Putin accepted the fact that society was changing the way of doing business. He also stated that cryptocurrency and digital payments would revolutionize and ease payment systems while facilitating a fresh business model. In fact, Vladimir Putin also showed his support for Ethereum, a cryptocurrency developed by a Russian programmer Vitalik Buterin. In his speech, Putin announced that Russia’s Central Bank would launch a national cryptocurrency to promote digital payments in Russia.

Russia’s own national cryptocurrency – CryptoRuble

Vladimir proposed his plans on creating a national cryptocurrency for Russia. He also suggested that the national cryptocurrency will be known as ‘CryptoRuble’ based on Russia’s ‘Ruble’. It was later disclosed that the aim behind developing a national currency was to promote the use of blockchain technology for business, levy tax on the miners, initiate ICOs and create a reliable and thorough digital payment system for people.

The current insight of cryptocurrency in Russia

Cryptocurrency emerged as a revolutionary financial invention which improved digital and cross-platform payments across the globe as broadly outlined on reputable platforms such as a bit greedy. It also provided ample opportunities to countries for developing their economy on a global level. Thus, the potential and economic scope of cryptocurrency attracted Russia to a large extent.

Russia has always been keen to invest in cutting-edge technology, promising financial ventures and deals that can help in improving its global reputation and relations. The country is also known for making smart investment decisions, and thus, its increasing interest in cryptocurrency is not surprising.

Russia has become an admirer and a meticulous promoter of cryptocurrency these days. From politics to banking, Russia aims to introduce blockchain technology in different sectors. It is using cryptocurrencies to improve its economy, recover from the previous economic losses and establish profitable relations with other countries.

Russia’s participation in cryptocurrency development

A lot of Russians claim that cryptocurrencies were always famous and aspired in Russia. This is a country which has given a lot of mathematicians to the world while contributing to cryptocurrency development. Ethereum, the second most popular and widespread cryptocurrency of the world, currently trading at $256, is developed by a Russian – Vitalik Buterin. Apart from this, a lot of Russian developers are engaged in developing blockchain technology and different cryptocurrencies. Some of the other successful projects are Golo - a social network based on blockchain technology and the Russian Miner Coin project.

What made Russia refrain from cryptocurrency?

Several factors are working behind the adaption and use of cryptocurrency in Russia. First, for any technology, it is essential to establish a strong customer base while in Russia, there are barely 50,000 people who are familiar with cryptocurrencies. This significantly affects the growth potential and acceptance of a cryptocurrency. Due to less awareness, Russia’s first cryptocurrency exchange failed and was shut down within four months of opening due to stumpy demand.

Secondly, Russians felt scared of cryptocurrency bubble. As the faith of people in cryptocurrency grew weaker, the Russians too refrained from accepting cryptocurrency while considering it as a bubble. Apart from this, the Russian Central Bank and President of Russian Federation banned the use of Bitcoins while enforcing a strict law and seven years of imprisonment for those who owned a Bitcoin. This negatively affected the number of people supporting cryptocurrencies in Russia.

Why did Russia start supporting cryptocurrency?

Russia always finds its share of benefits in any technology it adapts. While other countries are promoting the use of cryptocurrencies, Russia is busy in encouraging the development and use of cryptocurrency.

One of the most substantial reasons for acceptance of cryptocurrency in Russia is its global presence and prominence. Russia never fails to indulge in profitable and resourceful technologies which can benefit the country on a long or short-term basis. Keeping this in view, cryptocurrency is considered as the most profitable investment in the present context.

Thus, keeping in mind the global acceptance and leadership cryptocurrency can provide in areas like politics, banking, and finance; Russia offered its support to cryptocurrency. Apart from this, for strengthening digital and cross-platform payment methods, Russia also proposed plans to launch its national cryptocurrency. Russia has been facing a substantial economic downfall since 2014 due to drop in oil prices and legal sanctions. In such a situation, embracing cryptocurrency can help Russia to regain its global power and economic stability.

Thus, keeping in mind the ample benefits and opportunities cryptocurrency can bring in; Russia opened the doors for cryptocurrency!

Final thoughts

Undoubtedly, the phase of banning the currencies to legally using the cryptocurrencies in different business niches; Russia has persistently spun the bottle for the cryptocurrency. It has now accepted cryptocurrency as a promising form of digital payment because of its extensive popularity throughout the world. Though a lot of bankers and politicians still have biased thoughts about the reliability of cryptocurrency, Russia has already built a strong base for digital currencies in various business sectors.

Why is Russia so active in the crypto world?

Mark Schwarz

Mark Schwarz is the author of the abitgreedy.com, a trading guide for cryptocurrencies. Mark is involved in crypto since 2012 and he is a big fan of bitcoin.

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