Russia and Iran Pushback on Crypto

We spend a lot of time talking about how cryptocurrencies are being adopted all over the world, but there are some places where pushback is occurring.

In Russia, the national bank recently announced they were considering a gold-backed digital currency for use in international settlements. Putin recently called for more concrete legislation around cryptocurrencies, and this seems like a step to almost avoid making a clear decision and instead forge a new route.

By working on digital currencies instead of looking at decentralized crypto assets, it is fairly clear that Russia intends to continue to maintain control over the flow of money within their economy. It has been rumored that the use of crypto assets in Venezuela was Russian-backed and meant to be an experiment on how these digital assets function within an economy. However, their stance on unregulated digital currencies is can be summed up with the quote:

“We are generally opposed to cryptocurrencies being launched into our monetary system. We do not see the possibility that cryptocurrencies could act as monetary surrogates.”

Iran Sanctions Causing Censorship

Another instance where the use of cryptocurrencies has been stifled is in Iran. LocalBitcoins has recently announced the suspension of their service for Iran-based users. Trading volumes had been increasing on the platform, and then mid-way through the week trades stopped being posted. Users were told they could withdraw their coins but would not be able to perform any more trades.

This is a major blow to Iran’s cryptocurrency community, as LocalBitcoins enabled the purchase of Bitcoin without users needing to give credit card or identification information. This level of anonymity is especially important under regimes

The most likely potential reason is the U.S. sanctions on Iran and LocalBitcoins not wanting to get caught in the middle of that. Several new options have popped up that are more censorship-resistant, but it is sobering to realize that governments still have some control over how the ecosystems are operated.

Coinbase Pushing Forward

To juxtapose this news against other developments in the industry, it was just announced that Coinbase has opened up their Earn program to be available to the public in over 100 different countries.

This initiative allows users to get paid a small amount of a token to watch a few videos on that token. 0x, Zcash, Stellar Lumens, and Basic Attention Token are all part of the program now, and it has turned into a great way to get people interested and less afraid of Bitcoin. Coinbase stated:

“Many of the people we surveyed expressed a strong desire to begin learning about new and different crypto assets beyond Bitcoin, but didn’t know where to begin.”

This seems to be part of a larger push that Coinbase has to add trading in more countries and continue their rapid expansion throughout the world. They are generally viewed as the most accessible trading platform, and this only serves to emphasize that as they become available in countries like Uzbekistan and Argentina.

Another route to bringing cryptocurrency worldwide is the projected launch of a Facebook Coin in 2020. This “Globalcoin” is going to be tested near the end of 2019 and according to the BBC, Zuckerberg is meeting with economists to learn more about the risks of launching his own cryptocurrency.

So with digital currencies being created by governments, cryptocurrencies both spreading rapidly and being banned, and massive corporations creating their own cryptocurrencies, it seems like we are in a period of rapid change in the space.