As Russia continues to press on to the fact that Crimea belong to the Federation now, the more brutal become the actions that US takes against it.
Certainly, cryptocurrencies are not going to help government institutions but maybe they can become the last resort for Russian citizens abroad, stranded without means to get back, having their bank accounts frozen.
The previous sanctions imposed by US government look like child’s play comparing to what Visa did. The official spokesperson for Visa in Russia made this public statement (translation from Russian site):
“The USA treasury has imposed sanctions against a number of Russian citizens and organizations. In order to comply with the legal system of USA, Visa International Service Association is obliged to halt the access to the Visa network for these organizations.”
He also added that there four banks that have been affected for the moment (21st March): Sobinbank, Rossiya bank, SMP bank and Investcapitalbank. There were no warnings beforehand; that Friday Visa as well as MasterCard simply ceased to process the transactions of the aforementioned banks.
Matthew Branton, Bitcoin expert and Founder at Coinlock, LLC commented: “Liquidity has a way of routing around national level blockades. This type of action will do more harm to Visa and Mastercard than it will Russia in the mid to long term.”
Could Cryptos be of assistance?
Come to think of that, while I was writing the article I realized that, while not exactly a solution to the problem, cryptocurrencies can become a temporary measure to get some breathing room for the time being. At least until the hype on Crimea goes down.
Being stranded in a foreign country without the means to travel or even get oneself something to it is bad enough, but knowing the your friends or relatives cannot immediately fill your card with some is a nightmare. I feel that soon Russian embassies everywhere are going to be crammed with people asking for help to return to the homeland.
That could have been partially avoided if Bitcoins had better reputation in the RF. Should government had supported the arrival of cryptocurrencies onto their territory, there would be no problem sending/receiving money across the borders. The only thing that could halt something like that is to completely cut off Russia from the Internet and I am not even looking into a possibility of that happening.
Supporting the Rears
Still, that is only one half of the problem, the other half is what to do with economic infrastructure that was using Visa or MasterCard. Well, here goes thing that was considered by some countries and cryptoenthusiasts but never went beyond speculations. What if country made its own cryptocurrency fully supported and probably mined by government?
Sounds crazy but just for situations like this - to keep contact with actives on the other side of the borders. I mean, Russia has some hardcore specialists in digital security; certainly, they could make something on behalf of their country.
“Ultimately local Russian business will find a way around these sanctions, and may very well leverage the incredible payments framework provided by Bitcoin and the Blockchain to do so. If anything Crypto currencies stand to thrive in environments where outside forces are trying to restrict capital movement”, added Matthew Branton.
Where Is It Going?
I do not mean to speculate on the fate of Crimea, but I do not see why governments have not yet begun inventing and minting their own cryptocurrencies to empower infrastructure not crumble it.
Russia is just an example of how a country could run into the cage without implementing new tech into the old systems, rewriting the latter. Especially, when one wants to redraw the world map.