Novye Izvestia was dealing with the complexities of the new currency diversity.
Yelena Ivanova, Natalia Seibil
Bitcoins and blockchains have long ceased to be exotic in our country. Russia ranks third in the world in terms of cryptocurrency sales. But this does not mean that our country has become a bitcoin paradise. For a long time, crypt operations were in the gray zone and were not regulated by the state. This is easy to explain, since the annual turnover was low. But in 2019, the total capitalization of digital money reached $ 195 billion, an increase of 50% in this one year alone. Crypto trading volume has increased fivefold. Facebook announced the creation of its own cryptocurrency Libra. Bitcoin in the past year has risen in price by more than 2 times, and this year its value has doubled in August, reaching 12 thousand dollars for one digital coin. Such growth rates are forcing large players to enter the cryptocurrency market. Now Goldman Sachs has opened a cryptocurrency branch, and some banks have decided to create their own. JP Morgan is working to create its JPM Coin. Sberbank did the same. When majors enter the market, the state inevitably follows them.
Cryptocurrencies and regulation
Gradually, cryptocurrency turned from a toy for freaks into a tool for speculation on the stock exchange. Now a new stage is beginning - the crypt is becoming a payment instrument. It is clear that this is not a short path, but everyone understands this, otherwise why would the authorities be engaged in this. Different states followed their usual paths - from “do what you want, just don't break the law”, as in America, to “keep them all,” as it happens in Russia or China.
"Regulators looked at cryptocurrencies exactly like this: well, a speculative asset, well, yes, but like all speculative assets, we will also regulate and supervise them. Someone is very tough, like the Chinese. The Americans took a freer path. If you want, please, just register. And then - we will see violations - we will punish. Indeed, a couple of times they aggressively ran into a number of operators with huge fines, landings, and so on”, - says Nikita Maslennikov, head of finance and economics at the Institute of Contemporary Development.
After a relatively quiet stage of promotion for the cryptocurrency, processes began that resemble the era of "dotcom" - the boom of Internet companies in the late 20th - early 21st century. Companies appeared that started issuing bitcoins by issuing tokens. In essence, a token is the right to future preferences through participation in capital with the subsequent payment of dividends. There are classic examples, for example, you can become a co-owner of a common asset. For example, in the Moscow region, if you purchase tokens for bitcoins or ether, you can become a co-owner of a breeding herd, getting the right to a fixed receipt of several tens of kilograms of beef. However, there are not many positive examples. International statistics show that 9 out of 10 token issues end in nothing. Either the companies go bust, and then everyone who bought up the issue remains at a loss, or these were initially fraudulent schemes.
Cryptoeconomic lobbyists believe that the future is still digital money. This became especially noticeable during the pandemic, when citizens preferred to pay with any other money, but not cash.
"In the West, there is a process of normal regulation, when the monetary authorities of not only Western but also Eastern countries understand that a new type of money has appeared, which has no alternative. This can be prohibited, not prohibited, but these markets are developing, technologies are improving, and the smartest authorities are engaged in regulation, not bans", - says Yuri Pripachkin, president of the Association of Cryptoeconomics, Blockchain and Artificial Intelligence.
In July of this year, the Russian state hand finally reached the crypt. On January 1, 2021, a ban on the use of cryptocurrency to pay for goods and services comes into force. The regulator of the country's financial market, the Central Bank, has prepared an instruction that unqualified investors can dispose of cryptocurrency in an amount not exceeding 600 thousand rubles. For bitcoins and ethers, it will be possible to participate in the capital of non-public companies or buy cryptocurrency backed by assets. This raised a lot of questions in the community. The bitcoin rate is growing, from 600 thousand it can easily turn out 1 million 200 thousand, even if nothing is done with them. And then what? Or there may be different rates on different exchanges, and then at what rate should you count?
The State Duma believes that in principle it is impossible to control cryptocurrency. That is why it is used for money laundering and other illegal transactions, says Anatoly Aksakov, Head of the State Duma Committee on the Financial Market.
“Do we need to legalize this form of exchanging fiat currencies for cryptocurrencies, if they are mainly used for questionable transactions? Mostly not always, of course. In my opinion, the overwhelming majority of them are used to finance something illegal”, - Aksakov does not hide his opinion.
Bitcoin and blockchain companies believe that their enemy in Russia is the Central Bank. Yuri Pripachkin is outraged:
- Our Central Bank, unfortunately, took a position of forceful sabotage, instead of being involved in regulation. He does not understand the processes due to his incompetence, due to his conscious position, because they are trying to reduce all this only to the question that cryptocurrency is supposedly used only for money laundering. This is absolutely not true. This is an absolute myth, it is not supported by anything. Moreover, cryptocurrencies, by their very nature, are public and transparent. This is clearly shown by all cash flows. Maybe our Central Bank is not interested in legalizing all cash flows that will be visible when transferring to the blockchain?
Pripachkin believes that regulation is deliberately sabotaged, and this is the position of the Central Bank and its head Elvira Nabiullina, which actively interferes with all processes, rather than helping them.
Is the central bank putting a spoke in the wheels of cryptocurrency? Yes, this is not true, sheer lies, exclaims the economist Maslennikov:
- You are forcing cryptocurrency on me. Take the trouble to explain the risks. What are the risks here? What does it mean - Russia will become among the leading ones? About what? About mining? Emissions? Sorry, mining is stealing electricity from the economy. And nothing more. Well, it will be exchanged. How? Who will control it? The Central Bank is against!
Cryptocurrency and digital ruble
The main risks of cryptocurrency are not technological in nature. The questions of who is responsible for it and how it is supported are becoming more significant. Cryptocurrency means for the Central Bank the emergence of alternative emission centers that are not controlled by the state, says President of the Association of Russian Banks Garegin Tosunyan . The crypto is based on completely different principles, where, as in the blockchain, there is no dominant organizer:
- Our country is distinguished by a great preference for monopoly government influence on the monetary sphere. And there is logic in this. The presence of cryptocurrency wrests this impact from the hands of the state to a large extent. So the Central Bank cannot be delighted. Official fiat money is backed either by the authority of the state or by an emission machine. It is obvious that the state is behind them. It is responsible for money.
"The ruble has depreciated - questions to whom? To the state. The dollar jumped up - questions for President Trump. Or vice versa - he fell, and obviously there will be questions to the possible President Biden. But bitcoin fluctuates back and forth, so who are the questions? The crypto is not backed by anything other than the trust of the players who play this cryptocurrency game", - explains Nikita Maslennikov.
This is another financial instrument, according to economists, in which classic market risks are fully present. Wherever the issue of money through tokens is used, there are risks. Do you trust those with whom you want to do this business? How well is the project you want to do calculated? Have you checked all participants? Even if we ignore the possibility of fraudsters being involved, the business simply may not “fly”, and then the risks combine like a parade of planets.
Central bank, digital ruble and digital revolution
The Central Bank is interested in creating a national digital currency, which he offered to discuss with the professional community. What the digital ruble should not become is a kind of non-cash payment turnover, which is under full government control. In addition, there are risks, and these risks are serious. China has been engaged in the digital yuan for three years, so far there has been no big progress. The cryptocurrency community is skeptical about this initiative:
- Bitcoin is recognized as an official means of payment in Germany. In Germany, the Czech Republic and other countries, these payments are used. They are absolutely transparent, they are fast, and in this regard, the fast payment system, which the Central Bank is trying to implement, will simply not be needed by anyone when a cryptocurrency payment instrument appears. And even now, the Central Bank has announced that they will make a digital hand, which means that its outdated developments will be used, on which a lot of money has been spent, but there is zero sense. She's just going to die.
If we argue in this logic, then, according to opponents of the digital ruble, it can be compared with Glonass or the MIR system. There is such a risk, says Garegin Tosunyan, but the Central Bank is smarter than Glonass, and it will not impose, but will show advantages.
- True, you called the system MIR, there is excessive monopolization of the segment. This risk is present, but I hope that life will tell you that in any system such monopolization by the state is excessive, banks cannot be enthusiastic about such an imposition.
But it's not just about building out outdated software. It seems that the monetary authorities have begun work on building a new architecture for the financial system. Now the Central Bank issues money, and the banking system distributes it across the market. All other financial intermediaries receive pieces of the issue from banks.
- The meaning of the official digital currency is that the Central Bank becomes a distributor for all subjects of the financial market. Not banks, not only banks, but all entities that are represented on the market can turn to the Central Bank, because this is an electronic wallet. This is a different degree of control, a different centralization of financial flows, but the Central Bank copes with this at the very least, but a different configuration of financial markets arises. Is this a Russian problem? Not at all.
The main opponent of digital currency is not the Central Bank, but banks, says Nikita Maslennikov, because in 10 years banks will simply not be needed. Bill Gates also said that banking is important, but banks are not. Financial services will remain, but their specific institutional reflection will change. Digital currency is the path to a financial revolution.
If we introduce the digital ruble, then, taking into account modern technologies, all payments can be made through the Central Bank, agrees Garegin Tosunyan . Then, through commercial banks, settlements are generally no longer necessary.
- But banks are needed not only for settlements - alternative solutions can be found in this. Banks are needed in order to accumulate free funds and then place them. They are needed for individual work with each of the market participants. The central bank will not lend and service every market participant. And it will not accept deposits from each market participant, otherwise it will turn into the State Bank of the USSR, the effectiveness of which we already had the opportunity to evaluate in due time.
Digital ruble and cryptocurrencies
Nevertheless, other than all scammers and potential criminals, it is quite possible to assume the parallel existence of both cryptocurrency and the digital ruble in the country's financial system. There can be no opposition either - or. They have different tasks. The cryptocurrency does not claim to replace the national currency. A strict ban or restrictions may lead to a situation that was already in the USSR at the end of its existence, when the underground market for dollars and Deutsche Mark blossomed, despite the threat of imprisonment.
Cryptocurrency is also about technology. Yuri Pripachkin says: - I will emphasize once again that we are talking about the problems of regulatory regulation in order not to lose our own projects. After all, it may turn out, as always, that projects will be completed and go to the West, and there they will develop - as always. The same Telegram. These are all from the same series. The situation is similar, as we already had with the same genetics, electronics... This is all from the same series. In our country there are many such examples when our own developments and technologies are lost or left to the West, and we have lost our place in the new economic order.
The central bank as a regulator is acting very cautiously, market participants say. But the creation of a digital ruble does not mean the automatic death of cryptocurrency in our country. They have different philosophy. The digital ruble leads to monopolization by the Central Bank of settlement operations. The cryptocurrency is aimed at diversification in the financial sector. Reasonable compromise is possible and desirable. If you only want it.