We
estimated
recently that entire countries may choose to jump into a
decentralized financial system flooded by CryptoCurrencies, in order
to escape from the monopoly of the Western hard currencies.
Less
than two months later, it was the turn of Venezuela to announce that
is considering to issue its own CryptoCurrency. As MintPressNews
reports:
Months after Russia became the
first country to announce the creation of a state-backed
Cryptorouble, Venezuela has followed suit, announcing the creation of
El Petro, a state-sanctioned cryptocurrency to be backed by
Venezuela’s extensive reserves of crude oil.
Venezuela has already broken
free of Dollar dependence months ago when Caracas announced it would
be trading its oil using China’s Petroyuan. Venezuelan President
Nicolas Maduro also stated that he would like to begin trade with
Russia in the Rouble. With Venezuela heavily sanctioned by the United
States, El Petro looks to be another tool which Venezuela can use to
continue and conduct international commerce without relying on Dollar
based financial institution.
Crucially, while existing
Cryptocurrencies tend to create their initial value through an
arithmetic process called “mining”, leaving them heavily subject
to market fluctuation, El Petro will be backed by a known commodity,
oil, thus giving it a clear advantage for risk-averse investors.
While the world’s most popular cryptocurrency Bitcoin, has seen its
value skyrocket against the Dollar, some remain unconvinced of its
long-term prospects for stability. A currency, backed by oil would,
by contrast, ostensibly fluctuate in accordance with the well
established global price of Brent Crude.
[...]
An official oil-backed
cryptocurrency could work in tandem with Russia’s soon to be
launched Cryptorouble, a digital currency which will ostensibly be
backed by the vast resources of the Russian state. With western
governments ambivalent about how to treat existing cryptocurrencies,
Russia and Venezuela have taken the lead to both normalize cryptos
while backing them by well-known assets.
More
countries are expected to follow the example of Russia and Venezuela,
or BRICS as a whole. An interesting case is Greece. Many
in Greece are considering
Bitcoin and other alternative
currencies as a solution against the monetary dictatorship of the
ECB.
Recall
that, while Greece was
the major victim of an economic war, Germany used its economic power
and control of the European Central Bank to impose unprecedented
austerity, sado-monetarism and neoliberal destruction through silent
financial coups in Ireland,
Italy
and Cyprus.
The Greek political establishment collapsed with the rise of SYRIZA
in power, and the ECB was forced to proceed in an open
financial coup
against Greece when the current PM, Alexis Tsipras, decided to
conduct a referendum on the catastrophic measures imposed by the ECB,
IMF and the European Commission, through which the Greek people
clearly rejected these measures, despite the propaganda of terror
inside and outside Greece. Due to the direct threat from Mario Draghi
and the ECB, who actually threatened to cut liquidity sinking Greece
into a financial chaos, Tsipras finally forced to retreat, signing
another catastrophic memorandum.
Under
a really open-minded government that will seek to liberate Greece
from the ECB dictatorship, Greece may become the next country that
will choose to abandon euro currency sado-monetarism through its own
CryptoCurrency. This will also permit Greece to find an alternative
on the rapidly growing market led by BRICS. Under similar
circumstances, the entire European periphery may follow. Countries
who also suffer from the euro sado-monetary prison, like Portugal,
Spain, Italy and Ireland could issue their own CryptoCurrencies in
order to escape from the euro-tyranny.
But
the CryptoCurrency alternative could be used by the eurozone
countries also as a backup plan against a potential collapse of the
rotten eurozone structure in the close future.
Again,
the CryptoMarket anarchists have nothing to fear. A CryptoCurrency
issued by BRICS, or some member-states, or even other countries
separately, will not be a threat for the decentralized nature of the
rest of CryptoCurrencies. On the contrary, it will give them a
significantly wider field and greater opportunities for all kinds of
transactions inside a dynamically growing economic bloc which, if
nothing else, does not rely on wars and destruction to maintain its
dominance.
However,
authorities should not exhibit excessive control on certain issues.
There should be a viable balance between free activity and
regulation. Russia already works
to regulate virtual currencies:
As
the Russian government is working on laws to regulate virtual
currencies, the country's finance ministry has proposed making their
mining illegal. However, buying
them will not be punishable.
"The
penalties will be different, mostly administrative, but if someone
created the cryptocurrency for the purpose of settlements, then there
will be a criminal punishment," said Deputy Finance Minister
Aleksey Moiseev.
Criminal
penalties can also be applied to the creation of a financial pyramid
or the issuance of a cryptocurrency to avoid tax, he said. The
minister stressed buying bitcoin, and other cryptocurrencies would be
legal.
Moiseev
added that work on the bill could drag on, as it includes many new
words and concepts now absent in Russian legislation.
At
the moment, bitcoin mining and selling are not regulated by Russian
law. President Vladimir Putin has ordered the government to create
legislation governing the status of bitcoin, other cryptocurrencies,
mining, initial coin offerings, as well as defining everything that
relates to digital money by July 2018.
The
Ministry of Finance earlier suggested introducing mandatory
registration of cryptocurrency miners and only to allow legal
entities and individual entrepreneurs to participate.
The
reliability offered by entire countries who will back the global
CryptoCurrency market through their rich resources and economies will
normalize and stabilize the market, while will restrict the fraud,
speculation and other illegal activity through Bitcoin and other
CryptoCurrencies.
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