Russia Turns to Crypto

Not completely new or unexpected, but still worthy of some attention:

The new legislation gives the Russian government (particularly Russia’s Central Bank) greater latitude to monitor and support the transfer, mining, and operation of crypto-currency producers within the country. It also builds a foundation for a digital reintroduction of the ruble, which will reassert the Russian government’s capacity for monitoring domestic financial transactions. Overall, the legislation is wonderful news for Russia’s crypto industry and even for its energy sector, which will benefit from crypto-miners’ immense power needs.

Russia shares this enthusiasm for crypto with the increasing right-wing collection of tech-industry oligarchs who have collected around Elon Musk, a group that itself has become increasingly sympathetic to Russian war aims.  

There are, of course, risks. Russia has traditionally taken great care with the crypto-currency industry, as tolerating the sector has meant allowing Russian citizens considerably greater latitude concerning their ability to buy and sell products. Technologies that allow individuals to escape surveillance and control have rarely been welcome in the Russian political context. However, the Putin government has determined, in part out of desperation, that the benefits outweigh the risks.

Will it work?  Probably not.  Crypto transactions are almost comically easy for advanced financial investigators to detect. Thus, the businesses and organizations that will accept crypto in order to avoid US secondary sanctions will quickly find themselves under scrutiny and subject to action.

I guess maybe there are limits to the “everyone who likes crypto is stupid or evil or both” heuristic, but I’ve certainly never found them.