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Crypto-Rouble: Russia to launch first state sanctioned cryptocurrency in the world

Russia has decided to embrace technology and make it work both for the government, businesses and consumers.

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Russian President Vladimir Putin has made history today, when he endorsed the creation of a soon to be unveiled CryptoRouble, the world’s first cryptocurrency endorsed by a state.

Russian monetary experts and political leaders have recently begun engaging in a debate which pitted monetary conservatives against monetary radicals. Most Russian officials agreed that allowing the use of western designed (though not western state endorsed) cryptocurrencies such as Bitcoin, was not compatible with Russian financial security concerns. China, for example, reached a similar conclusion about existing cryptocurrencies.

In Russia, the debate then quickly evolved into to a question over what role if any, a government and central bank should have in respect of cryptocurrencies. Conservatives argued that the entire process of blockchain cryptocurrency technology should not be accepted as a legal alternative to traditional state issued notes, while radicals argued for the creation and regulation of a uniquely Russian cryptocurremcy. The radials have clearly won and appear to have been embraced by President Putin.

Here’s What We Know About CryptoRouble

The CryptoRouble is being worked on at the moment and should be available soon, although a precise timeline is not yet available.

According to Sputnik,

“They can be exchanged for regular roubles at any time, though if the holder is unable to explain the source of their CryptoRubles, a 13 percent tax will be levied. The same tax will be applied to any earned difference between the price of the purchase of the token and the price of the sale”.

Existing cryptocurrency exchange rates are based on the supply of a given cryptocurrency, in proportion to demand for converting such a cryptocurrency into a traditional currency, at a given time. By contrast, it is expected that the CryptoRouble will have an exchange rate related to the Rouble, although it is not clear if it will be formally pegged to the Rouble. Such a pegging scenario does however seem initially probable.

While advocates of autonomous cryptocurrency exchange will almost certainly adopt the traditional ultra-libertarian line that any government regulation into cryptocurrencies makes them scarcely different from using traditional currencies in the online domain (Paypal for example), long time advocates of cryptocurrency in the retail and wholesale sector will almost certainly look with interest to this new development.

The Benefits 

A Russian CryptoRouble that can be easily exchanged for traditional Roubles in Russia and ostensibly anywhere else in the world, will automatically give the new cryptocurrency a marketplace  confidence that many alternatives currently lack. Such a phenomenon will de-mystify the process for many possible cryptocurrency users.

At the same time, if in the eyes of the Russian government, a CryptoRouble is as legitimate a currency as the Rouble, it will allow wholesalers, retailers and possibly even independent financial traders to use the CryptoRouble to avoid the sanctions against Russian banks which their own anti-libertarian western governments have imposed.

Additionally, if the CryptoRouble becomes easily convertible to popular western originated cryptocurrencies such as Bitcoin, it would solve the problem of Bitcoin users being ‘shut out’ of the Russian market. All one would need to do in order to engage in transactions with Russian businesses using a cryptowallet, would be to digitally exchange one’s Bitcoins (or any other existing cryptocurrency) for a desired amount of CryptoRoubles. The aforementioned process would generally take the same amount of time or even less than a traditional online bank transfer.

In this sense, the CryptoRouble helps open up Russia for new entrepreneurial ventures while insuring that possible fraud and money laundering loopholes are closed.

The Potential 

During September’s BRICS Summit in Xiamen, there was a great deal of discussion regarding the establishment of a cryptocurrency for the BRICS nations (Brazil, Russia, India, China South Africa) and their partners.

BRICS in talks to create own cryptocurrency in another blow to US Dollar

Such a coin would have all of the advantages of the CryptoRouble with the added benefit of instant legitimacy and even desirability across some of the world’s most dynamic and growing economies. It could also facilitate easier money transfers between BRICS members. This would be particularly helpful for Chinese businessmen who often have trouble getting large sums of Yuan out of the country in single transactions. A BRICSCoin, if based on the Russian security net could plausibly alleviate similar existing Chinese concerns about cryptocurrencies. As China has begun trading oil futures contracts in Yuan which can be converted to gold at the Shanghai and Hong Kong gold exchanges, one could foreseeably be looking at a BRICScoin that would effectively be backed by gold, in certain instances.

Furthermore, Russia has become the number one global market for the Chinese mega online retailer AliExpress. An easily convertible CryptoRouble has the potential to make such transactions even more beneficial in the future.

India, which is currently suffering a monetary crisis after Prime Minister Narendra Modi eliminated the 500 and 1,000 rupee notes, could stand to benefit from a new, legal and legitimate means of monetary exchange. A BRICSCoin could help to stabilise India’s monetary markets after Modi’s decision to ban the 500 and 1,000 rupee notes, hit the incomes of many working class Indians. In a country where more people have modern phones than old fashioned bank accounts, a BRICSCoin could be a form of salvation, as well as a way to modernise the monetary sector with few infrastructural requirements.  In this sense, a BRICSCoin could also help to draw India back into the BRICS fold after the recent Doklam/Donglang border dispute caused tension between New Dheli and Beijing.

Overall, having a cryptocurrency that is directly tied to a traditional Rouble, could end up making the Rouble an increasingly popular international currency of exhcange and in so doing, take a bite out of Dollar dominance for small and medium exchanges just as Russia’s commitment to conduct bilateral international trade in national currencies, is steadily doing in respect of large sovereign transactions and deals between major corporations.

The Rationale 

While monetary radicals throughout Russia have welcomed the move, President Putin justified the creation of the CryptoRouble on far more pragmatic grounds. He stated,

“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbours in the EurAsEC (Eurasian Economic Community) will”.

In other words, ‘if you can’t beat them join them’. Implicit in this logic however, is that since Russia has blazed a self-described inevitable trail, others will now be even more likely to get on the state sanctioned cryptocurrency bandwagon. Thus, Russia could be at the forefront of a pan-Asian phenomena that could eventually go global. This will also translate into Russian blockchain technology becoming uniquely attractive to other states looking to develop their own ‘official’ cryptocurrency.

In this sense, Putin has done what the music industry infamously did not do in the late 1990s. In the late 1990s, illegal peer-to-peer music download services allowed web users to download free music that did not pay the owners of the copyrighted sound material. Using Metallica as the public face of the lawsuit, the major western record labels sued the largest such service, Napster. The record labels won the lawsuit and the battle, but ultimately lost the war.  By the time the legal actions against Napster were won in favour of the record companies, the cat was out of the bag and new illegal file sharing services popped up every day, but more importantly, entrepreneurs from the e-commerce and software world, developed legal alternatives to Napster that continue to dominate the marketplace (iTunes, Spotify, Amazon, Google Play etc).

Where the music industry used to handle the distribution of recorded music, often up to and sometimes including the retail point of sale, today, the music industry is having to work in a largely subservient role, with companies that are newer than many of their best selling digital albums. The music industry tried to sue technology into oblivion and instead, the next generation of technology companies have largely consigned the music industry to being a shell of its former self in both North America and much of Europe.

Conclusion 

Russia has avoided the pitfall of the 1990s US/EU music industry, albeit on a much more substantial scale. Just as Paypal and other online apps have destroyed many physical bank branches, in the coming years, there is a very real possibility that as cryptocurrencies get easier to use and become more widely accepted for day-to-day transactions, they could supplement the largely old fashioned banking/monetary system. When this happens, countries that reject cryptocurrencies for fear of not being able to collect revenue from such transactions, will find themselves totally shut out.

Russia has avoided this pitfall by embracing technology and making it work both for Russia, for consumers and for commercial interests. It’s a win-win situation and this is almost certainly, only the beginning.

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Macron cuts ski holiday short, vowing crack down on Yellow Vests (Video)

The Duran Quick Take: Episode 109.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the 18th consecutive week of Yellow Vests protests in Paris. Following last weeks lower participation, Saturday’s Yellow Vests in Paris gathered larger crowds, with various outbreaks of violence and rioting that has been blamed on extreme elements, who French authorities claim have infiltrated the movement.

“Act XVIII” of the protests has shown that the Yellow Vests have not given up. France’s Champs-Élysées boulevard was where most of the violence occurred, with the street being left in a pile of broken glass and flames.

One day after Paris was set ablaze, French President Emmanuel Macron cut his ski holiday short, returning to Paris and vowing to take “strong decisions” to prevent more violence.

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Via Zerohedge


Paris awoke on Sunday to smouldering fires, broken windows and looted stores following the 18th consecutive Saturday of Yellow Vest protests.

Around 200 people were arrested according to BFM TV, while about 80 shops near the iconic Champs Elysees had been damaged and/or looted according to AFP, citing Champs Elysees committee president Jean-Noel Reinhardt.

The 373-year-old Saint Sulpice Roman Catholic church was set on fire while people were inside, however nobody was injured. The cause of the fire remains unknown.

The riots were so severe that French President Emmanuel Macron cut short a vacation at the La Mongie ski resort in the Hautes-Pyrénées following a three-day tour of East Africa which took him to Djibouti, Ethiopia and Kenya.

Macron skied on Friday, telling La Depeche du Midi “I’m going to spend two-three days here to relax, to find landscapes and friendly faces,” adding “I’m happy to see the Pyrenees like that, radiant, although I know it was more difficult at Christmas” referring to the lack of snow in December.

In response to Saturday’s violence, Macron said over Twitter that “strong decisions” were coming to prevent more violence.

Macron said some individuals — dubbed “black blocs” by French police forces — were taking advantage of the protests by the Yellow Vest grassroots movement to “damage the Republic, to break, to destroy.” Prime Minister Edouard Philippe said on Twitter that those who excused or encouraged such violence were complicit in it. –Bloomberg

The French President has family ties in the Hautes-Pyrénées, including Bagnères de Bigorre where his grandmother lived. He is a regular visitor to the region.

Emmanuel Macron (2ndL), head of the political movement In Marche! (Onwards!) And candidate for the 2017 presidential election, and his wife Brigitte Trogneux (L) have lunch April 12, 2017 (Reuters)

 

 

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Vesti calls out Pompeo on lying about Russia invading Ukraine [Video]

Secretary Pompeo displayed either stunning ignorance or a mass-attack of propaganda about what must be the most invisible war in history.

Seraphim Hanisch

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After the 2014 Maidan revolution and the subsequent secessions of Lugansk and Donetsk in Ukraine, and after the rejoining of Crimea with its original nation of Russia, the Western media went on a campaign to prove the Russia is (/ was / was about to / had already / might / was thinking about / was planning to … etc.) invade Ukraine. For the next year or so, about every two weeks, internet news sources like Yahoo! News showed viewers pictures of tanks, box trucks and convoys to “prove” that the invasion was underway (or any of the other statuses confirming the possibilities above stated.) This information was doubtless provided to US Secretary of State, Mike Pompeo.

Apparently, Secretary Pompeo believed this ruse, or is being paid to believe this ruse because in a speech recently, he talked about it as fact:

U.S. Secretary of State Mike Pompeo called Russia’s annexation of Crimea and aggression in eastern Ukraine an attempt to gain access to Ukraine’s oil and gas reserves.

He stated this at IHS Markit’s CERAWeek conference in Houston, the USA, Reuters reports.

Pompeo urged the oil industry to work with the Trump administration to promote U.S. foreign policy interests, especially in Asia and in Europe, and to punish what he called “bad actors” on the world stage.

The United States has imposed harsh sanctions in the past several months on two major world oil producers, Venezuela and Iran.

Pompeo said the U.S. oil-and-gas export boom had given the United States the ability to meet energy demand once satisfied by its geopolitical rivals.

“We don’t want our European allies hooked on Russian gas through the Nord Stream 2 project, any more than we ourselves want to be dependent on Venezuelan oil supplies,” Pompeo said, referring to a natural gas pipeline expansion from Russia to Central Europe.

Pompeo called Russia’s invasion of Ukraine an attempt to gain access to the country’s oil and gas reserves.

Although the state-run news agency Vesti News often comes under criticism for rather reckless, or at least, extremely sarcastic propaganda at times, here they rightly nailed Mr. Pompeo’s lies to the wall and billboarded it on their program:

The news anchors even made a wisecrack about one of the political figures, Konstantin Zatulin saying as a joke that Russia plans to invade the United States to get its oil. They further noted that Secretary Pompeo is uneducated about the region and situation, but they offered him the chance to come to Russia and learn the correct information about what is going on.

To wit, Russia has not invaded Ukraine at all. There is no evidence to support such a claim, while there IS evidence to show that the West is actively interfering with Russia through the use of Ukraine as a proxyWhile this runs counter to the American narrative, it is simply the truth. Ukraine appears to be the victim of its own ambitions at this point, for while the US tantalizes the leadership of the country and even interferes with the Orthodox Church in the region, the country lurches towards a presidential election with three very poor candidates, most notably the one who is president there now, Petro Poroshenko.

However, the oil and gas side of the anti-Russian propaganda operation by the US is significant. The US wishes for Europe to buy gas from American suppliers, even though this is woefully inconvenient and expensive when Russia is literally at Europe’s doorstep with easy supplies. However, the Cold War Party in the United States, which still has a significant hold on US policy making categorizes the sale of Russia gas to powers like NATO ally Germany as a “threat” to European security.

It is interesting that Angela Merkel herself does not hold this line of thinking. It is also interesting and worthy of note, that this is not the only NATO member that is dealing more and more with Russia in terms of business. It underscores the loss of purpose that the North Atlantic Treaty Organization suffers now since there is no Soviet Union to fight.

However, the US remains undaunted. If there is no enemy to fight, the Americans feel that they must create one, and Russia has been the main scapegoat for American power ambitions. More than ever now, this tactic appears to be the one in use for determining the US stance towards other powers in the world.

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Ariel Cohen explains Washington’s latest foreign policy strategy [Video]

Excellent interview Ariel Cohen and Vladimir Solovyov reveals the forces at work in and behind American foreign policy.

Seraphim Hanisch

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While the American people and press are pretty much complicit in reassuring the masses that America is the only “right” superpower on earth, and that Russia and China represent “enemy threats” for doing nothing more than existing and being successfully competitive in world markets, Russia Channel One got a stunner of a video interview with Ariel Cohen.

Who is Ariel Cohen? Wikipedia offers this information about him:

Ariel Cohen (born April 3, 1959 in Crimea in YaltaUSSR) is a political scientist focusing on political risk, international security and energy policy, and the rule of law.[1] Cohen currently serves as the Director of The Center for Energy, Natural Resources and Geopolitics (CENRG) at the Institute for Analysis of Global Security (IAGS). CENRG focuses on the nexus between energy, geopolitics and security, and natural resources and growth. He is also a nonresident senior fellow at the Atlantic Council, within the Global Energy Center and the Dinu Patriciu Eurasia Center.[2] Until July 2014, Dr. Cohen was a senior research fellow at the Heritage Foundation in Washington, D.C. He specializes in Russia/Eurasia, Eastern Europe, and the Middle East.

Cohen has testified before committees of the U.S. Congress, including the Senate and House Foreign Relations Committees, the House Armed Services Committee, the House Judiciary Committee and the Helsinki Commission.[4] He also served as a Policy Adviser with the National Institute for Public Policy’s Center for Deterrence Analysis.[5] In addition, Cohen has consulted for USAID, the World Bank and the Pentagon.[6][7]

Cohen is a frequent writer and commentator in the American and international media. He has appeared on CNN, NBC, CBS, FOX, C-SPAN, BBC-TV and Al Jazeera English, as well as Russian and Ukrainian national TV networks. He was a commentator on a Voice of America weekly radio and TV show for eight years. Currently, he is a Contributing Editor to the National Interest and a blogger for Voice of America. He has written guest columns for the New York TimesInternational Herald TribuneChristian Science Monitor, the Washington Post, the Wall Street Journal, the Washington Times, EurasiaNet, Valdai Discussion Club,[8] and National Review Online. In Europe, Cohen’s analyses have appeared in Kommersant, Izvestiya, Hurriyet, the popular Russian website Ezhenedelny Zhurnal, and many others.[9][10]

Mr. Cohen came on Russian TV for a lengthy interview running about 17 minutes. This interview, shown in full below, is extremely instructive in illustrating the nature of the American foreign policy directives such as they are at this time.

We have seen evidence of this in recent statements by Secretary of State Mike Pompeo regarding Russia’s “invasion” of Ukraine, and an honestly unabashed bit of fear mongering about China’s company Huawei and its forthcoming 5G networks, which we will investigate in more detail in another piece. Both bits of rhetoric reflect a re-polished narrative that, paraphrased, says to the other world powers,

Either you do as we tell you, or you are our enemy. You are not even permitted to out-compete with us in business, let alone foreign relations. The world is ours and if you try to step out of place, you will be dealt with as an enemy power.

This is probably justified paranoia, because it is losing its place. Where the United Stated used to stand for opposition against tyranny in the world, it now acts as the tyrant, and even as a bully. Russia and China’s reaction might be seen as ignoring the bully and his bluster and just going about doing their own thing. It isn’t a fight, but it is treating the bully with contempt, as bullies indeed deserve.

Ariel Cohen rightly points out that there is a great deal of political inertia in the matter of allowing Russia and China to just do their own thing. The US appears to be acting paranoid about losing its place. His explanations appear very sound and very reasonable and factual. Far from some of the snark Vesti is often infamous for, this interview is so clear it is tragic that most Americans will never see it.

The tragedy for the US leadership that buys this strategy is that they appear to be blinded so much by their own passion that they cannot break free of it to save themselves.

This is not the first time that such events have happened to an empire. It happened in Rome; it happened for England; and it happened for the shorter-lived empires of Nazi Germany and ISIS. It happens every time that someone in power becomes afraid to lose it, and when the forces that propelled that rise to power no longer are present. The US is a superpower without a reason to be a superpower.

That can be very dangerous.

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