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Dether Talk

Country Spotlight: Dether in Russia

In this post, we’ll be discussing the current state of crypto in Russia and five ways that Dether can make buying crypto in Russia easier.

The state of crypto in Russia: legislation, mining, and virtual fiat?

In an expansive country like Russia, it’s unsurprising that crypto mass adoption remains a dividing issue. While the country isn’t yet a crypto paradise, the government hasn’t taken any extreme measures to curb the use of crypto as of late. Dmitry Peskov, who serves as the president’s advisor on digital technology and developments, said recently that he felt that the government position on crypto was too soft, and could easy go the way of a pyramid scheme. This sentiment of fear was echoed in a recent conversation with Dether user (and first Dether seller in Russia), Kirill Voevodin, who told us, “Many people here are scared and just don’t understand crypto. I often hear people around me refer to it as a pyramid scheme.”

Despite a general sense of wariness about crypto, crypto mining is a booming industry throughout the country. As of October, nearly 75,000 business were mining cryptocurrency. The country’s cheap electricity and rich resources make it an ideal mining location. We spoke to Sergey Remezov, marketing director for Watson Tech. Featured prominently on the company’s YouTube channel, which advises viewers on crypto news and events, and the happenings of the company, Sergey serves as the energetic face of the company, which has made impressive headway in bringing mining from China to Russia — no easy feat.

Like many other countries, Russia announced plans for a “cryptoruble” in October 2017, yet little in the way of development has yet to come about post-announcement.

How easy is to buy crypto in Russia?

So, how are Russians buying and selling crypto today? The most popular exchanges are Changely, YoBit, and Spectrocoin, amongst others. In April of 2018, Sbercoin billed itself as the first Russian crypto-exchange accepting the ruble. Several Russian crypto users we spoke to reported problems with account freezing when using large exchanges. According to Kirill, “We often have a problem with bank account being ‘frozen’ due to what they consider to be ‘suspicious’ transactions.” Andrei, another crypto enthusiast, has also encountered this problem, said, “This often happens when people use their credit card on an exchange. Bitfinex was even banned by Roskomnadzor a few years ago. Since the beginning of July, Russian banks have frozen suspicious digital money transfers in regards with antiterrorist and anti-laundering regulation […] so this can be a problem for centralized exchanges.”

Centralized exchanges are also known to incur very high fees. “The sites that I use are very convenient: you get the money quickly, and there is a lot of choice of different exchanges and payment methods, but they definitely take a lot of interest,” said Dether community member, Vasil.

While these attempts to freeze accounts or set high exchange fees may seem to be a protective measure, some, like Andrei, are not so sure. “Sometimes it seems like these measures are more about how to escape economic sanctions than a concept of fair, decentralized economic relationships and private money. That is why we often hear some regulators discussing perspectives of blockchain technology from one side, equating cryptocurrencies with fiat currency, and then in turn saying that they should be strictly regulated or punished for using them. So the situation is very controversial in this case.”

Cash or credit? Spending trends throughout the country

While those in large cities like St. Petersburg and Moscow and most young people prefer to use credit cards, there’s still a preference for cash outside the city and by the older segment of the population. According to a VCIOM poll in March, 2017, 32% of Russians prefer using cash to make a purchase; 53% of those 60 years or older prefer cash, while only 17% of those aged 10–24 prefer using it. “In cities, digital payments (like cards) are more popular, but some regions have no conditions to widely pay with cards. But everyone understands that payments with cash are anonymous and crypto is a digital cash in this regard,” said Andrei about cash payments.

So while cash may not necessarily be king, it still carries a great deal of value in everyday transactions.

Why Dether can work in Russia

What does this mean for Dether in Russia? There are five benefits that Dether can provide to Russian crypto users (or the newsly “crypto-curious”):

  • The simplicity of cash. “Cashing out is better with cash,” said Dether user, Andrei. With the Dether beta app’s peer-to-peer system, users don’t have to wait to cash-out their crypto, and risk losing money due to slow processing times or high exchange fees. It’s enough to simply find a user around you on the Dether map, contact them to agree on where to meet, and walk away from your trade with cash in hand. Even solutions like Bitcoin ATMs that were once popping up throughout the country only allow for one-way transactions. Dether not only provides a simple solution for buying crypto, but selling it as well, turning anyone with a smartphone into a walking PTM (person teller machine).
  • Sellers can set their own fees. Major exchanges charge high fees, especially if buying directly in rubles. With Dether, sellers can set their own fees, and buyers are likely to get a better fee rate than on a major exchange.
  • Potential to spend crypto directly by finding shops on the Dether map. Payment for goods with crypto in Russia remain sporadic, but a 2018 Telegram poll found that 92% of crypto users would prefer to spend their crypto directly, as opposed to converting it to fiat first.
  • Easy access to stablecoins and project tokens. The Dether beta app provides access to tokens such as DAI, ETH, DTH, BNB, MKR, OMG, ZRX, AE, REP, HAV, and NUSD, which can also be exchanged for ether.
  • An easy way to encourage mass adoption. The Dether beta app’s intuitive interface and accessibility provides an excellent opportunity to spread educational information about buying crypto, in a format that’s accessible to anyone with a smartphone.

For Sergey, it’s all about how crypto is marketed in Russia, citing his own company’s struggle to illustrate the usefulness of crypto in Russia. “People aren’t going to use something they don’t understand, which is why education is a foremost step. Most people don’t realize how transparent the crypto process can be […] Dether could be very popular in this regard.”

Ready to become a Dether seller, or buy crypto with cash? You can start using the Dether beta app in Russia and 120 countries here!

Special thanks to:

Sergey Remezov

Dether community member, Andrei (who runs an educational Telegram channel in Russian here and in English here)

Dether community member, Vasil

Dether community member, Kirill Voevodin

Inna Jaakkola

*Some quotes have been translated or edited for clarity.

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