The Russian government has entered the bitcoin industry. This support is probably not unrelated to the ambition to bring about a fairer international monetary system.
Russia is banking on bitcoin
The growth of the Russian Bitcoin industry now exceeds that of the United States according to Igor Runets, CEO of BitRiver.
“Last year we caught up with the United States in terms of growth rate and the gap in absolute terms is narrowing”he told local media.
According to him, Russian industry could overtake that of the United States in the next two or three years. This growth is aided by recent laws that incentivize oil and gas companies to partner with bitcoin miners.
Bitriver manages 21 installations scattered across Siberia. Ten more locations are under construction. According to the CEO of the Russian exchange Kickex, Russia already represents 17% of world power.
For comparison, note that the United States' share is around 35%:
“The combined hashrate of the 14 publicly traded US miners has increased by around 70% since the start of the year (+80 EH/s) to reach 194 EH/s. This is faster than the overall 33% increase in hashrate. These miners now represent nearly 29% of the global hashrate”we can read in the recent report of the J.P. Morgan.
The perception of Bitcoin by Russian authorities is so positive that BitRiver just announced a partnership with the Russian Direct Investment Fund (RDIF) during the last BRICS summit.
This agreement talks on the surface of data centers to support the deployment of artificial intelligence within the BRICS, but Bitriver is a company dedicated 100% to the Bitcoin industry.
It is therefore difficult not to see a BRICS-wide benevolence for bitcoin here. Bitriver's sharing of experience with BRICS is all the less surprising given that the United States is preparing to create a “strategic bitcoin reserve” :
The failure of the Russian central bank
It was written in advance that Russia would turn to bitcoin. Let us recall that Russian banks were disconnected from the SWIFT network and that the country's approximately 300 billion euros and dollars of foreign exchange reserves were seized.
According to the monitoring company Chain AnalysisRussia uses bitcoin to circumvent Western sanctions. President Vladimir Putin recently signed a law allowing Russian companies to conduct international bitcoin transactions, under the supervision of the Russian central bank.
This carte blanche comes at a time when the central bank's efforts have not had the expected results. On the one hand, the digital ruble (CBDC) is in trouble now that the Bank for International Settlements has withdrawn from the mBridge project. And on the other hand, its SFPS system similar to the SWIFT network is also struggling.
These failures are due to the fact that the United States threatens foreign banks with closing their dollar accounts if they connect to the SFPS network. Succeeding in convincing the big banks of the BRICS and the rest of the world will take time.
But unless Europe and the United States return the $300 billion to the Russians, alternative monetary systems like bitcoin will continue to thrive. This is essentially what the Russian president declared this week during a discussion forum organized by the Moscow think tank Valdaï Club:
“We are not abandoning the dollar. It is the United States that refuses to allow us to use it. This is stupid of them since the dollar is the pillar of American power. Its use as a means of payment is not declining that much, but its role as a reserve currency is gradually diminishing. […] Our proposals are not directed against the dollar. They simply reflect our adaptation to the modern world. We are thinking about the payment tools of the future. »
Bitcoin, the reserve currency of the future
The United States seems to have understood this. Washington knows that the share of the dollar in global foreign exchange reserves will inevitably fall. BRICS will not go back. Trade will eventually take place on an equal footing between great powers.
Clearly, the United States will have to resolve to reduce its trade deficit, otherwise the dollar will collapse in the face of the refusal of major exporting nations like China or Russia to place their trade surpluses in Treasury bonds.
THE economic program of Donald Trump goes in this direction. We can read there:
“We will prioritize American producers over foreign subcontractors. We will bring our essential supply chains back home. Our trade deficit reaches more than a trillion dollars per year. We will implement customs taxes on products manufactured abroad. »
Republicans know that the exorbitant privilege of profiting from a chronically deficit balance cannot continue without consequences for the greenback.
The world will converge towards a more neutral monetary system. The dollar, euro, yuan and the SWIFT network will continue to take the lion's share, but alongside alternatives. Gold is one of them and the record purchases by central banks are there to remind us of this.
However, a modern alternative is emerging. Bitcoin has immense advantages. The first is to exist in finite quantity (while more and more gold is extracted each year). It is an absolute store of value, an essential attribute of a reserve currency worthy of the name.
Bitcoin is also a payment network as well as a currency, two-in-one. Transactions are virtually free and instantaneous, among other benefits.
All that remains is for China to turn around. In the meantime, the old continent remains the joke thanks to the Brussels and Frankfurt technocrats.
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