Decentralized Banking in Communist Russia??

When news broke a few months ago that Russian President Vladimir Putin was considering Bitcoin technology for the country’s financial platform, this was big news. Why? Because cryptocurrency as a public financial platform being used in a communist nation seemed like odd bedfellows.

What motived these developments wasn’t clear, but the punitive U.S. economic sanctions, which have weighed heavily on the Russian people, seemed likely. But one might wonder why Russia’s centralized bank, the Central Bank of Russia (CBR), would support a digital currency platform whose hallmark was, well, decentralization.

Then in April, Bloomberg Markets quoted Russia’s Deputy Finance Minister Alexey Moiseev as saying the reason was an attempt to staunch the billion dollar money laundering industry, which had forced many of the CBR’s lenders to lose their licenses.

Something didn’t smell right with this explanation given a year ago, Russia’s Finance Ministry was sending people to jail for using digital currencies. And if anyone were trying to extinguish money laundering, why would they choose a financial platform whose key feature is transaction anonymity – the hallmark of money laundering?

The sanctions alibi is a lot more plausible than anti-money laundering considering the Federal Reserve has always controlled the Central Bank of Russia’s (CBR) monetary policy, via the Bank of International Settlements or BIS of which CBR is a member. How this shell game of control operates is too complicated to describe here* but suffice to say the CBR can only print enough rubles as it has in foreign reserves (i.e. “dollars”), so its been a no-win scenario for Putin. As a result, it’s easy to imagine Putin, a 16-year veteran KGB officer, might be feeling cornered or caged in by the reality of centralized monetary policy.



Shaking loose the crippling U.S. sanctions surely motivated Putin to begin a strategy of “de-dollarizing” as was evident in the surprise announcement this past March that Russia and China just opened banks in each other’s country to strengthen financial relationships. Many interpreted this move as Putin’s strategy to bring back the gold standard, further derailing the U.S. dollar. And at the International Economic Forum in St. Petersburg this past June, Putin and his Finance Ministry were in lock step, emphasizing nationalization as their priority, touting digital currencies as another key strategy.

Following the forum, the press revealed more big news in that Putin had met with Vitalik Buterin, the wunderkind creator of the Ethereum digital currency platform, and endorsed Buterin’s game-changing blockchain platform. (Market cap status HERE.) As Ethereum wonks know, this distributed public blockchain network uses “ether” currency rather than bitcoin, with key features being democratic organizing and “smart contracts,” which are immune to fraud or third party (hacking) intervention. Talk about inconsistencies with Russian government.

For Russia to make its own cryptocurrency is the perfect ruse for nationalism and Ethereum could be the perfect vehicle. But what does Russia’s interest in moving to the gold standard and cryptocurrencies mean for world harmony? Irony and opportunity.



With Vladimir Putin, we see a leader of the largest communist country in the world, choosing to implement two prime drivers of economic freedom as a means of getting out of his cage. This is the same cage which has enslaved global citizens through a fraudulent central banking credit and loan system, promoting pervasive debt and economy-crushing interest that favors the few at the expense of the many. Fabrication? Consider these perspectives:


“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford, circa 1925


“The few who understand the system, will either be so interested from its profits or so dependent on its favors, that there will be no opposition from that class.” . . . “Let me issue and control a nation’s money and I care not who writes the laws.” – Mayer Amschel Bauer Rothschild, 1744-1812


“My agency, in promoting the passage of the National Banking Act was the greatest financial mistake in my life. It has built up a monopoly which affects every interest in the country.” – Chief Justice of the US Supreme Court and Advisor to Lincoln, Salmon P. Chase, 1864



Without centralized banking, perhaps through digital currency platforms, we have an opportunity to engage with one another in a completely new operating paradigm, one that discourages parasitic behavior from conventional brokers (bankers), instead delivering power to the masses.** An open source computing platform like Ethereum means we don’t have to fight a coercive and antiquated banking system, but rather create a new economic system that makes the former obsolete.

The security and transparency of Ethereum is providing opportunities in crowdfunding, identity-theft protection and collaborative workforce networks. Developing economies who have limited access to banks or global financial systems are using the blockchain technology to eliminate costly intermediaries, opening up huge opportunities for every budding industry to benefit.



One can argue whether Putin is in innovator in this new emerging financial system, but there is no doubt we are witnessing a seismic shift in how we digitally transact with one another. Japan, China, Singapore, Canada, the UK and other countries are seeing their central banks experimenting with digital currencies. Deutsche Bank in Germany sees the writing on the wall:


“Blockchain technology is credited with having a particularly sobering impact on banks. By using the global computer network, this technology is enabling all transactions conducted in the world of finance to be documented in a presumably forgery-proof, near-real-time and, above all, decentralised manner, i.e., potentially without central securities, depositories or banks.”Dr. Andreas Dombret, Deutsche Bundesbank, Member of the Executive Board


Even in this rapidly advancing digital era, it’s not likely centralized banking will go the way of floppy disks. But many will be watching how a Communist behemoth like Russia can regulate it’s financial system while promoting an unregulated medium of exchange.



*The international banking system is complicated by design. Here is a video perspective that makes it easy to comprehend.

**The popularity of cooperative banks is growing, where governance is decentralized and the banks are member-owned. Along with numerous credit unions, another co-op bank model is Sweden’s JAK, a 40,000-member bank that provides no interest loans.






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