Finally, our Central Bank plucked up courage and formulated about cryptocurrencies what everyone already knew, understood, but was a little afraid to say openly in order to avoid accusations of non-progressiveness and hostility to modern technologies. For some reason, "modernity" is still perceived in a positive way, as something to which one must strive. Although there are so many different kinds of mold around that it’s time to advocate for a rollback back to a nice reasonable past. Long live regression, paper notes and the gold standard.
Yes, yes, it was gold, as a solid, proven means of accumulation for centuries (and in previous eras, and payment) that the Central Bank cited as an example for an adequate assessment of cryptocurrencies in its report “Risks of Cryptocurrencies and Possible Regulatory Measures”. The amount of gold in the world is finite. But the volume of emission, for example, bitcoin is virtually unlimited. But most importantly, gold, unlike cryptocurrencies, does not depend on information technology in any way, the regulator notes. It's like that. Should there be a general kirdyk, humanity will again switch to the yellow metal. Where will the bitcoins be? You know.
The report of the Central Bank is intended for public consultations. However, the position of the regulator is more than clear. It is proposed to prohibit the use of the Russian financial infrastructure for working with crypto assets. If this happens (hopefully!), it will be impossible to mine, as well as use cryptocurrencies as a means of payment, investments will not be possible. But no one forbids owning them in foreign jurisdictions. Good riddance. True, the Central Bank intends to monitor such investments by Russians on foreign trading platforms. The motherland of the cunning will get everywhere. And rightly so.
Even the very word "mining" sounds annoying. Like a scam. If it is still legal, then so be it, but only until the state changes its mind. “Gray mining has become a problem for the Irkutsk region,” “they make money out of thin air,” the media write about some Siberians. Once hard workers, and even earlier service people, hunters and pioneers have turned into useless miners for society, rubbing their sweaty hands with joy for their plump bitcoin wallets. They mine cryptocurrencies using the reduced price of electricity in the region. Parasites. Is this why the great Soviet civilization built the Bratsk hydroelectric power station there?
And you don't have to justify them. This is not only a question of morality, but also of justice. The public good is actually privatized by some of the most nimble, I dare say, and the laziest, and even unprincipled members of society. In addition, miners, albeit indirectly, are pulling money from the pockets of other Russians. How? The increased popularity of crypto production has spurred the demand for equipment - video cards, semiconductors, etc. Computer technology is now not fun, but a working tool. Especially during the pandemic, when many people are working remotely. Its increased cost is a direct blow to the budget of families. Miners are stealing milk from our children.
The smart Central Bank reasonably points out that cryptocurrency mining also contributes to an increase in the carbon footprint.
After all, we have adopted goals to reduce greenhouse gas emissions, signed the Paris climate agreement.
And the current scale of mining in Russia calls into question the achievement of these goals.
What will Greta Thunberg say?
Again we want to shove like savages against the whole world?
We have just joined the global family of peoples with great difficulty - and again we will hide in a bearish corner, we will embark on our own “special Russian path”?
In Europe, for example, the regulator advocated a ban on the most energy-intensive mining method.
It's only the beginning...
We need to think more about people and less about numbers. This is what the banking regulator thinks. Especially in the Central Bank they are worried about the savings of citizens. The explosive growth in the value of the same bitcoin confused more than one immortal soul. The temptation to keep your savings in crypto is too great. Including for banks to which the Russians entrusted their hard-earned money. However, the collapse of the virtual currency can devalue them in an instant, just as deposits in savings banks burned down as a result of Gaidar's reforms. The state still cannot pay the bills. Do we want to repeat that situation?
The functioning of cryptocurrencies is similar to financial pyramids, the Central Bank notes. The growth of the exchange rate is largely supported by demand from new market participants. Those who invested in crypto at an earlier stage sell it at a high price at their expense. One day this pyramid will collapse, and the means bye-bye. The Russians, let me remind you, have rich experience in this regard. At one time, every second player played in MMM in the country. How many of them turned out to be millionaires? And the organizer himself, after serving time, died alone at a bus stop. The only thing worse is the GKO pyramid, which had a state scope. The Central Bank does not want to repeat the mistakes of others.
But perhaps the most serious threat posed by the uncontrolled circulation of cryptocurrencies could be the undermining of money circulation and the loss of the sovereignty of the ruble. A high level of cryptoization (similar to currencyization) will limit the effect of the regulator's monetary policy. The state will lose power. This will lead to high inflation, the need to keep an inflated key rate to combat it, which will reduce the availability of credit (it will soon be impossible to borrow anything over the hill due to sanctions) and, as a result, will lead to economic stagnation. Miners will be fine, but everyone else will be bad.
Do we have a state that exists only for the elite?
If not, then it is necessary to be guided by common interests.
This is exactly what the Central Bank is doing now.
In this sense, the information circulated by Bloomberg that the regulator’s position is explained by the alleged arguments of the FSB (they say that Russia’s geopolitical opponents finance the liberal opposition with bitcoins) is hardly credible.
It could be only one of the reasons, but not the main one.
The independence and effectiveness of monetary policy is one of the fundamental foundations of a country's sovereignty.
Perhaps even more important in our time than guns and tanks.
The question is political.
The state is simply obliged to create and maintain an environment for the life of all Russians.
It is not permissible to dilute it for individual private individuals in their own interests.
The point of view of the author may not coincide with the position of the editors.