Excuse the pun, but VP has been on the warpath of late, and as this proxy war rages on and the economic war with the west continues, Putin is trying to sure up things back home. Despite how strong the ruble has gotten, that isn't a guarantee that life for the average Russian who simply wants to work and feed their family is a whole lot better.
For Russian savers, of which there aren't that many, the average savings range between 140,000 rubles and 219,000 rubles ($2,100 and $3,300 respectively so a minority of people with savings or a decent income were able to enjoy an increase in purchasing power.
While the majority are seeing the burden of their debts grow and it's becoming harder to live. If you're seeing your purchasing power rise from your salary or savings and paying back your debt is not as attractive now, what do you do?
You'd be encouraged to dump it into assets that would allow you to outpace your debt burden or that you can get for a steal based on the current increase in your fiat currency. It's no secret that Russians have been flocking to bitcoin and shitcoins and while they aren't that big a part of the economy, Putin aims to give it a boundary.
Keeping you in the ruble
Putin's goal is to keep demand for the Ruble high, he has done so internationally by setting up swap lines to purchase Russian exports in Rubles, now he has to sure up things on the home front and keep businesses, individuals, and funds trading and settling in the local currency.
Demand for the ruble means banks can lower the interest rates which the Russians raised to around 20% to defend their currency. It's now moved down to 9.5% but it's still around double what it was prior to the war.
When a country's interest rates are high it slows down economic growth, it makes it harder for businesses to borrow, for people to pay back loans and as the currency strengthens, less currency needs to change hands driving deflation.
Russia cannot afford to have a deflationary spiral right now, so it needs to get currency flowing locally and more rapidly, how they will do this is anyone's guess.
I don't see Putin as someone who isn't thinking clearly, he obviously feels he needs to sure up things, but he does see that bitcoin plays a part in Russia's future, just not as a medium of exchange.
President Putin expressed enthusiasm for Bitcoin mining, when he said that Russia had “certain competitive advantages” including a “surplus of electricity and well-trained personnel available in the country” to mine the currency.
Something I'd be surprised if he doesn't take on, with the abundance of energy he has available in his country.
So why my heading? You see shitcoins promote gambling and pretend to be a medium of exchange, it wants to compete as a way to make transactions so if that use case is gone what is the point?
Bitcoin is a savings technology, it's what the vast majority of people use it for so it isn't going to be that big a problem to have this regulation put in place. In fact it's encouraging Russians to be hodlers.
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