Bitcoin flirting with a Russian accent belies Confidence

In spite of the gloom descending over Russia regarding Bitcoin, it would seem not everyone shares the government’s opinion.

While the Duma recently moved to impose tough restrictions on private electronic money transfers and ban “surrogate currencies”, Russia Today recently published two articles which were considerably more positive.

Inexplicable U-Turn?

From its critical tone earlier this year, broadcasting the Russian Central Bank’s warnings about using cryptocurrencies, as of April 24 the service now carries an interview with ‘Bitcoin Jesus’ Roger Ver under the headline “‘Bitcoin better than any form of money that has ever existed before’”.

This followed an article from the previous day which led with “Bitcoin ‘cheaper and safer’ alternative to fiat money”. There has also been movement towards coverage of Bitcoin’s development, such as the BitSat project, whose press release was cheerfully quoted without a hint of criticism.

Contrast this with an article from January and an underlying progression becomes obvious: “Cryptocurrencies appeal to those skeptical of their government’s influence over currency, as well as Internet users looking for an invisibility cloak,” it is written bluntly below an image of shadowed bitcoins looming against a murky background.

What could be the cause behind this change of tack? The answer could well lie in one of the articles themselves. In response to a question regarding the Central Bank’s critical stance despite Bitcoin not being illegal in Russia, Ver said, “I don’t have a direct insight into what goes on inside of Russia, but one guy at the conference just a moment ago when I asked that same question, he said nobody cares”.

If the legislation passed recently does result in having an effect which is more rhetorical than legally binding, it could allow the situation with the general populace reveal itself. As Ver continues in the interview, “at the end of the day nobody can block or stop or prevent anyone using Bitcoin if they want to, it’s just a protocol and it just works.”

“Disrupting the political status quo”

Certainly, figures from popular media channels belie a swarm of Russian language activity in the Bitcoin space, with Bitcointalk showing 216280 forum posts from the community as of April 30, placing it second only to English and well above the third most popular language, German (150340 posts). “I can tell you that Russia is the number one source of traffic to, the number one Bitcoin website in the world,” Roger Ver additionally told the Coin Telegraph.

Far from being suppressed, questions should now be posed as to where Bitcoin is heading in Russia, and how it will evolve to reach its future potential.

“At some point, governments will realize that cryptocurrencies is disrupting the political status quo,” says Tuur Demeester of MacroTrends, “That means that if they have a desire to change the status quo, they might benefit from openness towards cryptocurrencies, or from acquiring them as a reserve asset.”

For the moment, however, community attention is very much focused on Vladimir Putin and his economic plans for Russia in light of the Ukraine crisis. Furthermore, Putin’s net worth has become a considerable talking point in the media, cryptocoinsnews noting some outlets estimating it to be in excess of US$70 billion.  

While Bitcoin ostensibly presents the solution to Western sanctions, for example, it is unlikely that this would change the government’s stance or result in liberalization of laws for Russian citizens.

“It's important to keep in mind that Russia's banking system is fragile and its inflation not unsubstantial,” Demeester continues, “These problems cause capital to flee, which in turn means a higher risk for systemic collapse. That is why capital controls are rather likely going forward, and for the general population that would mean dissuasive policies towards Bitcoin.”

It’s a sentiment echoed by Christian Ander, founder of BTCX. “I think Russia fears losing control over the money their people are using. And also they don't want to be left out this new financial era,” he says.

Looking to the future, however, the consensus is taking and more and more progressive line with regard to the real power behind Bitcoin and its ability to become an apolitical tool, regardless of the position of a country’s government.

As Aaron Koenig, General Secretary of the Global Bitcoin Alliance, tells The Coin Telegraph:

“Bitcoin is a superior technology with a huge potential for growth and job creation, so in the long run no politician - not even villains like Putin or Obama - can afford to act against it, as that would mean to damage their own economy.”

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