No, Crypto Payments Won’t Ruin Russia’s Financial System, Key Players Say

Is Russia harming its economy by banning crypto payments?

As Russia is about to officially ban crypto payments within its borders starting on Jan. 1, 2021, Cointelegraph tracked down some senior executives in the crypto industry to talk about the implications of such a ban.

Russia’s primary crypto opponent is Anatoly Aksakov, a member of the State Duma and a key architect of Russia’s crypto ban. In mid-August, Aksakov argued that legalizing crypto payments basically “means the destruction of a financial system.”

Speaking to Cointelegraph, major global crypto figures like BitGo CEO Mike Belshe and Binance’s head of operations in Russia and CIS, Gleb Kostarev, concurred that payments in cryptocurrencies like Bitcoin (BTC) pose no threat to Russia’s economy.

But we spoke to Gleb Kostarev, Binance’s head of operations for Russia and the CIS. Kostarev outlined that crypto payments are already adopted in countries like the Netherlands and Venezuela, and people all around the world already pay for goods and services in cryptocurrency.

“These working solutions are the result of the successful integration of traditional financial services and cryptocurrency projects. And here it should be noted that cryptocurrencies can hardly destroy the financial system, but without any doubt they can complement it.”

BitGo CEO Mike Belshe echoes the sentiment. He said that Russia’s financial crisis of 2014 has significantly impacted the strength of the ruble over the past five years. This negative impact “had nothing to do with cryptocurrencies.”

Belshe suggested that Russia could be following a pattern established by countries like Zimbabwe, Venezuela, and Argentina, which see any alternative currency as a threat to their own weak currencies. But he argues that taking this action for this reason is misguided:

“This never works, because the governments are unable to stabilize their own currencies, and the citizens need stability to survive — potentially forcing them to use alternate currencies or black markets. If Russia was truly looking out for their people, they would be embracing cryptocurrencies rather than banning it.”

Waves founder and CEO Alexander Ivanov is confident that crypto has no chance to harm any financial system. He compared Bitcoin payments to transactions that involve a foreign currency. “Crypto payments are unable to destroy any economy, just as credit card payments in foreign currencies don’t ruin it,” he said.

George Payne is the co-founder of crypto payment app GatePay. He is also certain that cryptocurrencies could certainly be used to bolster economic growth after countries establish “well-thought-out and executed policy.” He also questioned the feasibility of the ban on crypto payments, as there are ways to pay in crypto and stay anonymous. Payne said:

“Generally speaking, it would not really be possible to outright ‘ban’ cryptocurrency payments because of the nature of the technology – said payments can occur with minimal access to the internet and a decent level of anonymity.”