As I previously stated in my article ‘China V Bitcoin prices – Why investors should look at the bigger picture’:
“For people currently invested or looking to invest in bitcoin, it is important to remember that Bitcoin is a lot bigger than any one country, even if that country is one of the biggest players on the world stage.”
“It is also worth remembering that bitcoin is a global currency. As such, the opportunity for regulatory arbitrage ensures that there will always likely be a state that recognises the value of Bitcoin and are open and willing to cooperate with Bitcoin entrepreneurs, exchanges and start-ups to help build a robust Bitcoin economy”
“It is these states that will likely force the hand of the more reluctant states in the long term, as they enjoy the competitive advantage that comes from a growing Bitcoin economy that benefits from the use of an efficient, low cost, frictionless transaction network”
We began to see proof of this today when Bank of Russia deputy chairman Georgy Luntovsky indicated a loosening in the central banks stance on Bitcoin and Cryptocurrencies:
“At this stage we need to watch how the situation develops with these kinds of currencies. These instruments should not be rejected,”
Andrey Ostroukh from the WSJ reports:
“Russian authorities have softened their tone on Bitcoin; the central bank now says it won’t hamper the usage of the virtual currency whereas previously it had vowed to crack down on the electronic payment instrument.
The Bank of Russia is now accumulating information about so-called crypto-currencies and is not blocking Bitcoin, the central bank’s first deputy chairman Georgy Luntovsky said Wednesday”
While is waits to be seen if Russian authorities follow through fully on the back of this rhetoric, what is perhaps of significant value here is the speed in which the stance has changed from the beginning of the year.
This may have been contributed to by the rapid speed of developments in the Bitcoin space, especially in regards to its growing legitimacy. We have recently seen the first large and mid-cap companies begin to adopt Bitcoin as a payment method ( DISH, Expedia, Newegg) and many other large cap companies have stated there interest.
In addition to this, recent US sanctions against Russia as well as perceived overreach by a prominent US bank could have possibly been taken as another warning that Russia may need a more diverse set of tools to facilitate international trade in the future. This will only be compounded as the existing global financial system becomes more unstable and trust between major powers (especially the US) continues to deteriorate.
It will be interesting to see in the near future if this reversal in rhetoric from a superpower like Russia, creates further announcements from governments that have so far been more hardline inclined towards Bitcoin and Cryptocurrencies as a whole.