Following in the footsteps of other nations like Brazil, Poland, and Venezuela, Russia is considering setting up a strategic reserve of Bitcoin. Anton Tkachev, a State Duma deputy from the New People Party, proposes the idea to secure Russia’s financial stability amid sharpening geopolitical tensions.
Tkachev has confirmed that the proposal has been officially sent to Russia’s finance minister, Anton Siluanov, to assess the feasibility of creating a national reserve of Bitcoin. Local media reports also say the proposal offers convincing reasons why Bitcoin could be an alternative to traditional currency reserves, especially in an age of financial uncertainty and sanctions risks.
By taking this step, Russia now finds itself in the company of a growing number of countries considering Bitcoin a reserve asset. In recent years, using Bitcoin as part of the national reserve became popularized with the campaign of Donald Trump during his presidential campaign, and different countries have started to talk about the meaning of money in the system so as not to stick to traditional monetary systems.
A Russian Strategic Bitcoin Reserve Argument
In the proposal, Tkachev lists several reasons why Bitcoin ought to be regarded as a means of financing Russia. Perhaps one of the major things he argues is that Bitcoin could be used as a ballast against so-called traditional fiat currencies, made out of the same metal as those coins but, unfortunately, more exposed to inflation, volatility, or the effects of international sanctions.
As a global asset not under the control of any nation, Bitcoin can be a reliable store of value, writes Tkachev. Due to its rise to $100,000 in December 2023, Bitcoin has the potential to create huge profits from national reserves, he notes. He also points to the Central Bank of Russia’s ongoing trials with accepting cross-border crypto payments, demonstrating the country’s increasing interest in blockchain-based financial systems.
The deputy proposes that Bitcoin could be used to solve some of the challenges that the global geopolitical arena is currently facing, particularly challenges brought about by international sanctions and the resulting instability. Bringing in Tkachev’s suggestions is part of a wider developing trend of nations searching for other choices to control traditional currencies like the U.S. dollar through reserves.
The proposal echoes remarks from Russian President Vladimir Putin made in December at an Investment Forum in Moscow, called cryptocurrency an ‘unstoppable technology’ with great potential. Putin has praised Bitcoin as having a decentralized nature, where it recognised the cryptocurrency’s potential as a global reserve asset in a notable shift from previous scepticism.
BREAKING: 🇷🇺 Russian President Putin says “Who can ban #Bitcoin? Nobody.” pic.twitter.com/6mJ664BZZ8
— Bitcoin Magazine (@BitcoinMagazine) December 4, 2024
For Putin, Bitcoin is not just an investment. Rather, it’s a strategic tool against Western countries. After Russia’s 2022 Ukraine conflict, the freezing of $300 billion in Russian reserves underlined for Putin the precarious state of traditional financial systems, forcing the Russian government to look into decentralized alternatives like Bitcoin.
“Who can ban Bitcoin? The technology’s decentralization, Putin stressed, implied nobody. He also noted the growing worldwide trend towards non-state-regulated financial systems and that other electronic means of payment would face similar barriers in regulation and control.
Moreover, this proposal fits in with a broader change in Russia’s position on cryptocurrencies. Over the past few months, the Russians have started to roll out a more friendly framework for digital assets. 2022 saw Russia explicitly recognize cryptocurrencies as property and exempt VAT on cryptographic mining and sales.
Russia is laying the foundation for becoming a global player in the crypto space as part of its broader strategy to develop blockchain technologies and explore Bitcoin as a reserve asset. This shift will certainly change the shape of the country’s financial landscape, and what was once a follower of the global adoption of decentralized finance systems will become a leader.
Defending Bitcoin, Tkachev’s proposal represents a big, bold step in Russia’s role as a country in future global finance, although the volatility and risks associated with the technology are a concern for some in Russia. The debate around Bitcoin serving as a state reserve kept going as Russia made a big move that would impact the way countries manage finances all over the world.
