From Moscow to Istanbul on the blockchain: How cryptocurrency is strengthening bonds between Russia and Turkey
Russia
In January 2022, the Russian Central Bank proposed a ban on cryptocurrency trading, mining, and use as payment for goods and services. On Thursday, March 24, a shocking statement by the chair of Russia’s Duma Committee on energy caught a lot of people’s attention.
As Russia faces stiffening sanctions from many other countries, the government has decided to accept cryptocurrency as payment for its oil and gas export. It is noteworthy that this opportunity is exclusive to “friendly nations” such as China and Turkey. Chair Pavel Zavalny said
“We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan,” Navalny said in translated comments. “With Turkey, it will be lira and rubles.” “You can also trade bitcoins,” he added.
Russia considers countries that side with her amidst this war against Ukraine as “friendly”. Inadvertently, countries such as Poland and the United States are unfriendly and must pay for Russia’s oil and gas in Rubles.
Rubles has lost its value by 40% this year, and while this new development might seem like a smart move, opinions are that this will fail in the end.
Comparing the present situation to the late 1900s under the Soviet Union, history suggests that this will be another failed plan. Back then, an economy called Gosplan was invented, and the “end goal was to do away with money altogether.” That was not successful and might repeat itself, according to an opinion on Bloomberg.
The use of cryptocurrency to salve the economy will be risky, as crypto assets are volatile. Presently, gas contracts are agreed upon in Euros. While the United States has willfully banned the importation of Russian oil, the European Union dares not make such a bold move. This is because the continent depends on Russia for 40% of its gas, used in heating millions of homes and offices.
Speculations continue to come from many individuals. No one is certain about what will happen next. Both ordinary citizens and politicians in Russia have been using cryptocurrency to perform transactions too and evade sanctions. This worries NATO and the United States. Some crypto exchanges have been called to ban Russia from accessing their platforms.
These exchanges rejected the idea. Binance pointed out that “Crypto was meant to provide greater financial freedom for people across the globe.” They are concerned about common citizens who have been using cryptocurrency as a means to survive. Also, exchanges can ban individual wallets, as opposed to a general ban on Russia.
Turkey
The Turkish government banned the use of cryptocurrency to pay for goods and services in April 2021. Citizens are still permitted to trade them, nonetheless. The “Thodex scam” has brought reproach to the Turkish national for about a year now. Thodex was a cryptocurrency exchange that became defunct in April last year. The CEO, Faruk Ozer is on red notice by Interpol but is still missing. After the theft, investors lost access to their accounts and lost millions of funds collectively.
As citizens are restricted, a cunning scheme might be cooking amongst Turkey’s high officials. In 2018, it was reported that a cryptocurrency freight deal took place between Russia and Turkey. This was a secret transaction that involved the transportation of wheat from Russia to Turkey. Russia and Turkey are termed “partners in crime”, and their recent, favorable stance towards Blockchain technology might strengthen their malicious bond.
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