After the central bank proposed a crypto ban, Russian President Vladimir Putin hit the breaks, noting in a video conference that there are “competitive advantages” in crypto mining. He directed the CBR to consider the advantages of crypto mining, considering the country’s electricity surplus.
“Given his commentary, it is clear that the Russian president understands the long-term possibilities for digital assets and blockchain technologies. Interestingly enough, in the same speech, he also noted ‘certain risks’ that go along with cryptocurrencies, as well as the desire for the government and central bank to come together and act in a unanimous nature, something that many have long talked about,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
“The central bank does not stand in our way of technical progress and is making the necessary efforts to introduce the latest technologies in this area of activity,” Putin said.
“That statement is profound. It is a clear indicator that Putin is keenly aware of how these technologies will play out in the future. He doesn’t want to get caught on the wrong side of technological history. Asking the government for unanimity on the matter may well be a result of looking around at other global powers that are having trouble grappling with a united message when multiple agencies are in play. Getting the government on the same page always helps an industry’s confidence,” said Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“Regulation is sufficient to protect our citizens,” Ivan Chebeskov, the head of the financial policy department at the Russian Ministry of Finance, has said, alluding to the Ministry’s work on just that.
“With the talk of regulation and Putin’s discussion on risks, I’ll be interested to see how the country decides to deal with crypto-custody. Right now, the major players just aren’t living up to the needs of the industry,” said Gardner.
Fireblocks, which is among the best-known providers, found itself embroiled in a lawsuit with StakeHound, which alleges the custody company lost roughly $70MM of Ethereum, after the key vanished. As a result, StakeHound could not access over 38,000 ETH.
“Putin discussed needing ‘well-trained’ individuals in the mining sector. It only stands to reason that they would emphasize the same competency in custody. I think that, across the globe, we are likely in the beginning of a digital assets custody shakeup,” offered Gardner.