"He said that the sanctions regime has created an 'objective need' for cryptocurrencies."
While the rising transaction fees are making bitcoin less usable for everyday purchases, its strength is drawing in companies and nation-states looking to use the cryptocurrency. This is especially true for those locked out of the international financial system, as can be seen by the thinking of a top Putin aide.
Sergei Glazyev, adviser to Russian President Vladimir Putin, thinks bitcoin and other cryptocurrencies can help the country’s banking system to bypass Western sanctions, the Russian Rambler News Service reports. He said that the sanctions regime has created an “objective need” for cryptocurrencies at a meeting of the presidential administration on their legal status, according to Rambler.
He also advocated the creation of a national crypto ruble at the meeting, according to Rambler. Glazyev even suggested that Russian government agencies could use cryptocurrencies for transactions around the world related to “sensitive” services, the news agency added.
Dr. Glazyev is an economist and a member of the National Financial Council of the Bank of Russia. He was the minister of Foreign Economic Relations in Boris Yeltsin’s cabinet in 1992-93.
Glazyev has a personal incentive to see the Russian government find a way to defeat the sanctions as he is personally facing United States and European Union punitive measures for his role in the 2014 annexation of Crimea from Ukraine.
Besides Russia, other entities antagonistic to Washington have used or are looking into using bitcoin to bypass sanctions. These include Iran, Wikileaks, and even a Ukrainian shipping firm. In a related matter, North Korea is also suspected of using its army of hackers to steal funds from bitcoin exchanges to cope with its dire financial situation.
The American government is well aware of this issue and is known to be preparing a response. William Browder, a co-founder of a Russia-focused investment fund, will testify about the matter today before the U.S. Commission on Security and Cooperation in Europe (Helsinki Commission). He says that: “These cryptocurrencies are a gift from God to criminals and dictators who want to keep their money safe." He also thinks this calls for ”the urgent attention of the U.S. and other Western governments in relation to Magnitsky sanctions as well as all other sanctions programs.”