Russians should not invest in the ruble, experts say
Bitcoin is capable of generating large profits
Cryptocurrencies remain a volatile investment vehicle
International consortium of news organizations developing transparency standards.
The Russian ruble exchange rate is rapidly falling against the US dollar and bitcoin. Whether cryptocurrency will be able to affect the Russian economy and where to invest money for Russians, BeInCrypto asked experts.
Sergey Zhdanov, COO, EXMO cryptocurrency exchange:
– In 2020, Bitcoin has definitely become more attractive than the dollar. At what the US Federal Reserve contributed to this unrestrained printing of new dollars. The mere fact that one in five US dollars was printed in 2020 is astounding. In one incomplete year, the same amount of money was issued as in about the previous 10 years combined. As expected, this situation raises fears of dollar hyperinflation.
Against the background of the second wave of growth in coronavirus diseases, the US presidential elections, the approaching end of the year and the expected negative results and forecasts, the situation is likely to only get worse. Bitcoin is doing much better. Since the beginning of the year, the cost of the first cryptocurrency has grown by 83%.
In comparison with the most popular shares of large corporations in this indicator, it was second only to Tesla, but overtook PayPal, Amazon, Apple, Facebook. In June 2019, Facebook announced preparations for the release of the digital currency Libra. The social network project immediately attracted attention … More, Google, etc. Not only for 2020, but over the past 10 years, bitcoin, even adjusted for risks, turned out to be more profitable than gold and S&P500. Although BTC has been repeatedly scolded for its high volatility, it has been holding above $ 10,000 for more than 100 days – this is the longest period in history, even in comparison with 2017..
One of the most important advantages of bitcoin is its limited issuance, in contrast to modern fiat currencies, including the dollar. For this they began to call it “digital gold”, but only bitcoin is much easier to use as a means of payment. This has been said since the creation of the first cryptocurrency, but every year these features are gaining more and more value. It is not for nothing that we began to observe how large companies acquire bitcoin to insure their assets, and more and more banks around the world offer services for cryptocurrencies..
Equally significant is the fact that last week Iran approved Bitcoin as a legal medium of exchange within its jurisdiction, and is also preparing to use it for international settlements in order to circumvent US sanctions. The Iranian authorities seem to have taken into account the unsuccessful experience of Venezuela in issuing its own digital currency, which everyone refuses to use in settlements: both in international trade with the country and within the country by the population. Tehran at one time also announced the development of its CBDC Paper bills and coins may remain in the past due to a new financial instrument – the digital currency of central banks (CBDC). As of … More, however, he ended up opting for bitcoin. It is likely that in the future we will see similar recognition of BTC and other states. First of all, by those who are forced to look for alternative methods of international payments.
If the digital ruble project is indeed approved, and if testing and implementation really begins, there will still be many questions to be resolved. In addition, the technical side of the project was not presented. It is expected that the digital ruble will be launched on the blockchain, but in the report of the Central Bank itself, the word “blockchain” is mentioned only once – in the glossary. As the Central Bank itself notes, the digital ruble should help solve the problem of fighting poverty, and the fight against corruption is read behind the veiled formulations. It is easy to predict that at different stages of the implementation of this project, at different levels, the “system” will resist innovation, which can completely redraw it.
In addition, private banks have already expressed their concerns that in this way the Central Bank may take over some of their functions. It is clear that such a development of events may not suit them. Likewise, strengthening control over the use of money in digital form can alienate the common man from himself. There is a possibility, for example, that the digital will limit the ability to purchase foreign currencies. Non-acceptance by the population can limit the speed of adoption and the introduction of the digital ruble into calculations.
On the other hand, the digital ruble will help make transactions cheaper and faster. So these arguments may even outweigh the choice of which form of money to use. Nevertheless, it cannot be denied that the digital ruble can potentially help optimize financial flows in the country, which, of course, should strengthen the national economy. But even here there is a risk that the redistribution of cash flows may increase the volatility of the ruble as a whole, in all its forms (cash, card and digital) at the stage of implementation..
I will add that the digital ruble should not be viewed as a panacea for all economic problems. For example, there are already suggestions that the digital ruble will help get away from US sanctions by becoming a means of international payments. Here, the mechanisms for fulfilling such a scenario are not entirely clear: the digital ruble remains the ruble, that is, the national currency of Russia. It is not even a regional currency. The introduction of mutual settlements between countries in national currencies (bypassing the dollar) has been underway for several years now and without digital currencies of national banks (CBDC), but has not yet been able to completely replace the more common methods.
I think that the full legalization of cryptocurrencies in itself is unlikely to give a result. On the one hand, the problem of the country’s attractiveness for doing business remains, and on the other, there is a feeling that the moment itself has been missed. People who saw the opportunity and perspective in this sector, with a few single exceptions, opened their startups in other jurisdictions. An intellectual resource specializing in blockchain has flowed into foreign companies.
For the development of blockchain technologies, it is necessary to train qualified personnel, which requires both funding and time. In addition, the legalization of absolutely all forms of cryptocurrencies looks extremely dubious. For example, as in the European Union and China, the Russian government will most likely in any case prevent a private company from issuing a digital asset tied to the national currency and at the same time not controlled by the Central Bank. Allowing the use of anonymous cryptocurrencies also looks unlikely..
ANDnton Katin, CEO of SIMBA Storage:
Russia to Create its Own “CryptoRuble” After Denouncing Cryptocurrencies – NEWSBTC 10/16/2017
– Since 2017, we have been telling our community to invest in Bitcoin following one of the safest and most profitable strategies. Buying at least $ 150 every month, regardless of the course, does not wait for the ideal entry point, it will not be. We talked about the fall of the ruble and foreshadow its even greater fall in 2021.
If in 2020 it is still possible to store in dollars, because it is a little more reliable than the ruble, then only bitcoin and the Swiss franc are next, especially since you can now buy a crypto franc (xCHF) on Uniswap. This way you will save and increase. Be wary of the ruble, be wary of the dollar, divide the funds into 50% Swiss franc and 50% bitcoin and store them securely – this is the most important thing.
If they introduce the sale of all our resources through the crypto-ruble, or better through bitcoin, then our country will increase its reserves at the expense of a new world asset, bitcoin. In the future, I would recommend all countries to issue internal candy wrappers (crypto-ruble) and so on pegged to bitcoin, so that there is no endless emission, like the dollar. In tens of years, Russia may take the leading place in the number of bitcoin owners. Our country owns the largest number of resources on the planet, and now I’m not even talking about oil, but, for example, the same tree that vehemently buys up the whole West for its “candy wrappers” – dollars.
Andrey Amris, UMI cryptocurrency ambassador:
– It is definitely unsafe to hold assets in rubles. It is safer to keep the bulk in dollars and no more than 25% of your savings. There should be such a share that is not critical for the investor, that is, with a significant drawdown in the exchange rate, his welfare will not change significantly. It is worth investing in bitcoin and other promising cryptocurrencies There is a large selection of coins for investment on the cryptocurrency market. Each project team strives to attract maximum funding. Startups have to fight each other … More.
The future of the cryptocurrency is unknown. It’s not at all a fact that it will start. And even if it starts, it is not a fact that it will affect anything. We believe more in decentralized cryptocurrencies. We see a plus in the crypto-ruble that when creating their own digital currency, the authorities “approve” the very existence of digital assets, which include cryptocurrencies. So, perhaps, over time, it will be possible to come to the recognition of cryptocurrencies and their right to turnover in Russia..
To attract investment, you need to convince potential investors of reliability, stability, the existence of clear and common rules for all. Therefore, investors can still be attracted by the legalization of cryptocurrencies in countries such as Switzerland, Estonia or the Bahamas. The key question here is what will be the legalization in Russia. If it is made taking into account the realities of cryptocurrency instruments, then, perhaps, this will prevent the leakage of crypto projects from Russia to other friendly jurisdictions, and if they only put a spoke in the wheel, then there can be no talk of any investments. On the contrary, the crypto community will flee to other countries.
Georgy Paliani, cryptoexpert:
– I will answer briefly: it is always better to invest in yourself, in your knowledge, such investments always pay off many times better in the medium and long term than any currency, especially the national one. If we talk about things that are more applicable to financial markets, then I would advise you to diversify risks and buy currency, if you receive money in rubles, somewhere in the middle of the month, because if you look at the obvious trends at the end and beginning of the month, how as a rule, currency surges are observed. I would distribute the portfolio as follows: 50% – national currencies, the remaining half of the portfolio – cryptocurrencies, including stablecoins, which can also be staked.
I would like to say something encouraging, however, in view of the realities of the Russian market, I will say this: absolutely nothing. Let us recall the history of El Petro – the national digital currency of Venezuela, perhaps the loudest case, or some other isolated small examples – nothing of the plan was ever implemented. But given the fact that Russia is now under pressure from international sanctions, as well as the fact that the domestic policy of tightening taxes hits the pocket of Russians, the creation of a crypto-ruble could serve as an impetus for development, but most likely it will simply become another way of taxing taxes, already on digital money too.
My personal conviction is that in Russia something can change for the better, both from a political and an economic point of view, only if the external political vector and the direction of domestic policy change. It is foolish to expect that by legalizing cryptocurrencies, fundamental changes in the economy will occur. All the same, in the end, the hand of the state will take all the emerging business opportunities. Simply put, without changing the internal political system, it is impossible to achieve positive changes in the future..
Oleg Kurchenko, CEO of Binaryx:
– In the current situation, all financial instruments are under pressure due to the current situation in the world markets. Yes, the ruble is showing negative dynamics. Many investors invest in cryptocurrencies, despite the great risks in pursuit of extra profits that cannot be obtained in either ruble or dollar assets.
At the moment, the crypto-ruble is more of a test project and is unlikely to be able to affect the economic situation in the foreseeable future. Now many countries are trying to develop projects related to digital currencies of national banks. And Russia is one of the first on this list.
If we consider cryptocurrencies and related infrastructure, then we can talk about great potential, both in the creation of new high-paying jobs, and the emergence of new industries in the economy, if the legislation is transparent for all market participants.
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