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Will only speculate on coins? These countries also use cryptocurrencies to "defect"
The US Treasury Department said that as of now, the White House has imposed comprehensive sanctions on more than eight countries. Due to the political hegemony of the United States, these countries are unable to enter the World Bank system and cannot even trade with US allies because these trades will be settled in US dollars.
Using cryptocurrencies to evade US economic sanctions is gradually becoming a suitable choice. Countries such as Iran, North Korea, Russia and Venezuela have their own options.
As we all know, the US dollar accounts for 63% of the world's foreign exchange reserves. It is known for its security and the rule of law. Its supporters are even willing to bear the account deficit. This is why most elected governments choose to hold most of their dollar reserves. It is also the reason why the Fed has become one of the major creditor countries in the world. But the US Treasury Department said that as of now, the White House has imposed comprehensive sanctions on more than eight countries. Due to the political hegemony of the United States, these countries are unable to enter the World Bank system and cannot even trade with US allies because these trades will be settled in US dollars.
In order to circumvent US sanctions, Bitcoin is becoming an option. Why do you say this? First of all, the feasibility of the theory, the United States can not confirm its effective supervision and control. Bitcoin is the application of blockchain technology in finance and is itself a huge public accounting system. Most importantly, as an independent settlement system, it has a certain degree of impact on the US financial hegemony system. Sanctioned countries can be immune to dependence on the dollar if they use cryptocurrency for international trade. In this regard, countries such as Iran, North Korea, Russia and Venezuela have chosen different directions.
Russia: intends to use cryptocurrency to evade sanctions
Earlier, foreign media reported that Vladislav Ginko, president of the Russian National School of Economics and Public Administration, said that the new US sanctions would push the Kremlin to diversify its cash reserves into bitcoin. Only through the use of Bitcoin can the US sanctions be alleviated. Due to US sanctions, the Russian elite was forced to abandon US assets and the dollar, and invested heavily in bitcoin. The Central Bank of Russia has a reserve of US$ 646 billion and must diversify in case there is limited opportunity in the future.
As early as November 2018, Russian President Vladimir Putin said that after the new sanctions, the country had no choice but to cut its use of dollars in international trade. At the time, President Putin said: It is not that we want to break away from the dollar system, but that the dollar is far from us. The decision of the Federal Reserve and relevant policy makers is to raise their own feet.
At the same time, the Kremlin has been stockpiling non-digital gold as a shield for economic sanctions. The report shows that the government is selling US government bonds in exchange for precious metals. By August 2018, Russia had doubled its gold reserves in response to economic disputes with the United States. Russia’s gold purchases are so alarming that global gold purchases in November 2018 reached their highest level in three years.
In contrast to the field of encryption, the Russian Ministry of Finance (MinFin) believes that the creation of the digital currency supported by the Eurasian Economic Union (EAEU) is inevitable due to US sanctions. However, there is currently no complete plan for the Russian side.
Iran: The digital Rial road lacks international influence
In January of this year, according to Al Jazeera, as the Iranian economy was hit by US sanctions, the country turned to slowly develop virtual currency. The country may launch its first government-backed cryptocurrency in the near future. However, there is no official confirmation that Iran and other countries are actively participating in the central bank to issue cryptocurrency.
With regional rivals Saudi Arabia and the United Arab Emirates recently launched a joint cryptocurrency, Iran can also use cryptocurrencies or similar sovereign digital currencies to circumvent sanctions and trade with other partners. However, in addition to facilitating payments as part of a bilateral or multilateral agreement with a strategic partner, encryption technology is not immune to US restrictions. Coupled with the concentration of this digital currency, US sanctions will make it have no place in credible international transactions. It will not give ordinary Iranians an international influence, just like the legal currency it supports, and they have not had this effect for decades. The number of rials will certainly have an advantage in the local area, but I am afraid that the feasibility will not be perfect.
It is worth noting that Ali Divandari, head of the Iranian Central Bank's Monetary and Banking Institute, previously dismissed reports that Iran will evade sanctions through blockchain and cryptocurrency. Divandari believes that Iran's business and financial transactions are too heavy to be handled through new technologies such as blockchain. Blockchain technology lacks the ability to evade sanctions, and advice like this is immature and far-fetched.
But Iran’s official position on cryptocurrencies has changed and gradually gives the authorities more control over how blockchain technology fits into the country’s economy. It has recently been reported that Iran’s tourism sector will welcome cryptocurrencies because digital assets are considered equivalent to money (ie, legal currency). Iran is welcoming visitors by integrating cryptocurrencies in the tourism industry. Despite the many obstacles facing Iran's digital currency, some encryption enthusiasts in the country believe that the government's acceptance of the blockchain may create a more fertile environment for the industry.
North Korea: Using the blockchain to accumulate $670 million
According to Newsbtc, North Korea managed to accumulate huge amounts of $670 million in blockchain technology. The United Nations reported that North Korean hackers implemented investment scams, invaded digital wallets, hijacked private data, and obtained cryptocurrencies, which could be converted into legal currency (including US dollars) of non-government assets. Now, Kim Jong-un can sell these assets at any time in exchange for dollars. Therefore, the US economic sanctions against the North Korean regime are weakening.
This move by North Korea makes the political and economic bullying of the United States worthless. It does this not by using weapons, but by using a technique that anyone can mine. Therefore, Bitcoin is not only a currency but also a shield.
Venezuela: Issuing "coin coins" but controversial
After the US sanctions in 2017, the economic situation in Venezuela was worsened. In early 2018, Venezuelan President Maduro, using Venezuela’s deep underground oil as an “endorsement”, merged with the most fashionable concept “digital currency” to issue Venezuelan oil coins. The price is linked to the international crude oil market, but the Venezuelan government emphasizes that oil coins cannot be used for oil exchange and can only be used to pay taxes and pay wages. In addition, Maduro also asked the ten countries of South America to use digital currency together, and hopes that "coin coins" can become an integrated currency in the region.
Venezuela is the first country to issue digital currency based on national sovereign credit and based on its own oilfield gas resources as an objective equivalent. The bitcoin used for settlement is more like a bond that can be traded. There are also voices that evaluate it as "a means to get rid of the economic crisis." The United States has now taken measures to prohibit all US citizens from subscribe for oil coins through administrative orders, and offenders will be severely punished.
It can be said that Venezuela has introduced a controversial, government-backed cryptocurrency and has been banned by the Trump administration from using "Petro" transactions in Venezuela.
Editor in charge: Robot RF13015
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