01/24/2022, 09.27
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Moscow, Nur-Sultan and cryptocurrencies

by Vladimir Rozanskij

​The Russians want to ban transactions with digital currencies, which are difficult for the authorities to trace. They are used by criminal organisations, but also by humanitarian organisations, to escape Kremlin controls. In Kazakhstan, the trafficking of cryptocurrencies played a role in the recent riots.

Moscow (AsiaNews) -  Russia's Central Bank has proposed banning all operations with cryptocurrencies, to discourage their use in the country. According to Bloomberg sources, Bank President Elvira Nabiullina has taken this initiative under pressure from the FSB, the national security service, especially after recent events in Kazakhstan, which is considered a serious financial threat to the country.

The use of cryptocurrencies are widespread globally and differ in volatility, popularity and, above all, level of privacy. Often, cryptocurrency transfers are impossible to trace even for the special services of the various states. Financial analyst Vladimir Levčenko commented on Currentime.tv that "it is known that cryptocurrencies are primarily used for trading weapons, drugs and similar items related to organised crime, but they are also used in many other cases; many people use them as a useful investment tool to make money from their savings, without committing anything illegal".

Seven years ago, the most popular cryptocurrency, bitcoin, cost about 0 each, now it has reached about ,000, with peaks close to ,000; 11% of the world's cryptocurrency is made in Russia. It is not clear who the operators of this new type of financial market are. When the authorities declared the Naval'nyj Anti-Corruption Fund an "extremist organisation" last summer, its leader Leonid Volkov urged all members to make transfers to the Fund  in cryptocurrency, precisely because "it is not subject to the control of central banks and governments".

Naval'nyj's Fund survives abroad after being disbanded in Russia and publishes the revenues it receives: to date it has reportedly collected 666 bitcoins, but it is very difficult to translate this figure into dollars, euros or roubles, without knowing the dates of transfers and operations, and above all it is impossible to know the identity of the donors, which drives the FSB members crazy. In fact, this is the purpose of the crypto-system, according to Volkov: "As the state puts pressure on those who make traditional transfers from the banking system, we have to patiently learn to use a freer system".

In general, all Russian organisations on the blacklist of 'foreign agents' are trying to use cryptocurrencies, although it is impossible to quantify them. The problem is often that those who operate with this system submit to the rules of those who offer them, without the possibility of control not only by the competent authorities, but also by the investors themselves. The prohibition of this type of operation, moreover, is very unrealistic, unless access to the internet is completely shut down.

Cryptocurrencies are needed by the powers-that-be as well as by oppositions, in order to move financial resources across borders, especially in the presence of international sanctions. After China banned cryptocurrencies last autumn, Kazakhstan jumped to second place in the world in this field, and for many this was a not insignificant factor in the disputes that led to the street clashes in Almaty at the beginning of January. According to research by the University of Cambridge, Kazakhstan has an 18% share of the cryptocurrency market, with the US leading the way with 35.4%.

In Kazakhstan, mining (validation of cryptocurrency transactions) is favoured by the low cost of energy, the very factor that has provoked clashes in the streets over the prevalence of market logic over the lives of citizens, as well as very 'friendly' taxation. The advantages would all go to the ruling caste, hence the riots against the "Nazarbaev clan" and Russia's support for President Tokaev, also to defend its own interests: cryptocurrency is a lifeline from marginalisation in world markets, and the Russians have no intention of securing it for anyone, neither at home nor abroad, not even for their "brother countries".

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