Centralization In Crypto

Is the technology that was invented to fight centralization of financial power becoming more centralized? Current geopolitical developments are shedding a light on this question, so here's a short personal opinion-piece on the matter.

As with all economical sanctions there's a high risk that sanctions aimed at Russia's leadership, Putin, his government and supporting oligarchs, will hit Russian citizens who are in fact innocent bystanders. Last week a number of large western multinationals have joined the international efforts at sanctioning Russia, like Apple, Microsoft and Ikea. These companies don't offer anything that's in the realm of basic survival needs, so the impact is not of any immediate or crucial nature. However, Visa and MasterCard, the world's biggest credit-cards, have also announced that they'll "suspend operations in Russia over Ukraine invasion."

Now, this headline is misleading slightly if you don't read the rest of the article (something that happens far too often); in the second paragraph it's made clear that "all transactions initiated with Visa cards issued in Russia will no longer work outside of the country and any Visa cards issued outside of Russia will no longer work within the country," meaning that Russians are still able to use the credit card within their own borders. Still, this news will not increase trust towards "the west" in Russia and its citizens are indeed fleeing into stablecoins:

Russians are also flocking to stablecoins. As the U.S. and its allies unite against Putin’s aggression with sanctions and other measures, ordinary Russians are ditching the ruble for stablecoins. This is tantamount to a vote of no confidence by the Russian people in the regime’s actions, and may even hasten its demise if citizens become averse to transacting in rubles.
_{source: Competitive Enterprise Institute}

This is great and exactly why the whole crypto-revolution was started in the first place; regular people have an alternative to the centralized power of the almighty middle-men in banking and government. However, here are also signs that the crypto-space isn't entirely immune to the might of the traditional centralized powers. Did you know that MetaMask blocks all countries that are under U.S. sanctions?

MetaMask’s parent company, ConsenSys, wrote in a statement to CoinDesk that it observes U.S. sanctions on “Iran, North Korea, Cuba, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine.”
_{source: Fortune}

“OpenSea blocks users and territories on the U.S. sanctions list from using our services, including buying, selling, or transferring NFTs,” OpenSea said in a statement to CoinDesk on Thursday, after users in countries under certain sanctions from the U.S. complained they had lost access to their accounts.
_{source: Fortune}

You can read the entire article on Fortune: NFT marketplace OpenSea confirms it will block accounts hit by U.S. sanctions, reviving debate over how decentralized blockchain really is.

It's unfortunate, euphemistically speaking, that the dire developments in the Ukraine-Russia conflict have to be the catalyst, but all this is a confirmation that Decentralized Exchanges, and Decentralized stablecoins are in fact the way of the future. This is good news for Terra (LUNA) and their massive stablecoin library and UST, as Tether (USDT) rests on Ethereum with its massive transaction-fees and massive link to MetaMask. When even WEB3 DApps like MetaMask or a giant NFT platform like OpenSea aren't immune to the globalized power-structure, when they fail to offer a safe haven from sanctions by the global superpower(s), it's time to step-up our efforts at realizing a truly decentralized layer to ensure financial freedom for all.

Thanks so much for visiting my blog and reading my posts dear reader, I appreciate that a lot :-) If you like my content, please consider leaving a comment, upvote or resteem. I'll be back here tomorrow and sincerely hope you'll join me. Until then, stay safe, stay healthy!