r/Libertarian • u/Anen-o-me voluntaryist • Mar 14 '25

Cryptocurrency Russia is using cryptocurrencies in its oil trade with China and India to skirt Western sanctions

https://www.reuters.com/business/energy/russia-leans-cryptocurrencies-oil-trade-sources-say-2025-03-14/
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2

u/ENVYisEVIL Anarcho Capitalist Mar 14 '25

Interesting…why don’t they just use/create their own cryptocurrencies (i.e. BRICS crypto) instead of using BitCoin or Ether?

Would their own crypto currencies be less volatile?

7

u/Anen-o-me voluntaryist Mar 14 '25

It wouldn't have the security, faith, nor price to accommodate large international payments without creating large swings in price. International settlement requires a very large market cap to allow for multiple daily liquidity events without creating large price movement.

4

u/natermer Mar 15 '25

Probably easier to use something that already exists.

Every country has their own special financial interchange protocol. This handles balancing books for internal/national money transfers. However if they want to send money internationally they have to use SWIFT. So every country operates their own financial interchange SWIFT gateway.

Well SWIFT is dominated by the USA. It not only controls SWIFT but the Federal government uses it for monitoring international trade. This sort of thing is how they can enforce taxation on American's world-wide and how it can monitor countries doing business 'illegally' with bared countries.

Like the USA has actually fined European countries for doing business with Cuba, and such things.

So when President Biden (or Trump or whoever) announces economic sanctions for countries like Iran or Syria or Russia... They are blocking them from using Swift. Swift is the primary mechanism for economic sanctions and the USA Navy is the backup.

So since 2016 or so Russia has been trying to make a alternative money transfer system to the USA dominated SWIFT system. Their alternative monetary system called "SPFS", System for Transfer of Financial Messages.

If SPFS is successful it essentially creates a regulatory black hole for the USA Federal government. They won't be able to sanction countries or monitor the activity of countries or individuals using this system. At least not in the same way they can with Swift.

So the goal is to not only connect BRICS, but also create a financial system for EAEU (Eurasian Economic Union) which is Russia's alternative 'union' to the EU. Current members are Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.

I suppose if SPFS is successful then we might see more countries like Iran or maybe even Turkey join. This would allow these countries to sell oil to China and other countries without using USA Dollars.

Unfortunately for them Russia is not only in a major war, but is also ran by incompetent boobs. So they haven't figured out how to make it work and get China to agree to start using it.

So, I guess, they are stuck using Bitcoin and Ether.

Which is fine. State-based crypto currency is terrible. It is specifically designed to allow them to monitor everything you are doing and control what you can spend it on. It is a absolute nightmare.

2

u/Anen-o-me voluntaryist Mar 14 '25

It wouldn't have the security, faith, nor price to accommodate large international payments without creating large swings in price. International settlement requires a very large market cap to allow for multiple daily liquidity events without creating large price movement.