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Nearly all Chinese banks are refusing to process payments from Russia, report says
(www.businessinsider.com)
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this post was submitted on 15 Aug 2024
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Why would they not just use cryptpcurrency at this point?
Like, there is a solution right there. I don't support either of their governments btw but I mean come on, the answer is right there
The value of cryptocurrency is usually tied to the price. The price is determined at exchanges. Russia however can't use foreign exchanges as the accounts there normally require identification (some offer pseudonymous crypto to crypto swaps) as the exchanges don't accept Russians, and if you want to convert crypto to a currency, you need a bank account calling in that currency, which is not happening. If the exchanges even transferred money to those as they'd lose their license.
The value of cryptocurrency is much less than what you see on CMC etc. if you can't actually convert it to those currencies. Which is the main issue.
Add to this that most crypto currencies can be traced and having transacted with known Russian problematic accounts - even via proxies - taints your wallet, making it hard to impossible to buy and sell on exchanges later down the line.
The points do make sense. But I mean at that point why not just use the crypto solely for international trade with other parties going the same thing?
Especially using the one that can't be traced or tied back to any entity (Monero)
At that point it seems it would be trivial to convert into cash but also why would you have to if you could just use it between countries like that.
I mean I know people hatecrypto here but even they have to admit it seems like a better idea than getting no money through at all.
Because for those states and companies, crypto is a toy and not real money. Also not having a bank means your transactions are always final (nobody is putting up with multisig).
Crypto has been great for buying drugs via darknet and taking money from investors for partnerships that don't exist or make sense. Been using it myself actually. Also facilitates gambling, either via crypto casinos or directly against its price. Outside of that, traditional banking wins.
It's also questionable whether a state could acquire so much crypto quietly at this point. Most big holders are either very publicly about it, like Argentina, or confiscated it from illegitimate sources (like when Germany raided a darknet market operator).
I suppose they could mine it all themselves. To handle all its international trade, a good sized nation state would need the electrical production of a smaller nation state just for that.
The amount of crypto you can theoretically mine is independent of your hashrate and only dependent on the block reward plus transaction fees... and these are minuscule compared to what a state needs.
In practice, if an actor held even slightly more than 50% hashrate, trading with him would be a major risk. Which means that's about the upper limit of what you can actually mine.
See this was what I was really wondering. Some cryptp like Dogecoin and Monero have unlimited amounts that can be mined and while certainly not practical in my mind I was 100% thinking why not just mine a fuck ton of Doge or something and have it agreed upon that that is the international trade money.
I do see how converting it into a fiat currency would be problematic though but in that case wouldn't gold or silver also he able to be utilized?
The goal of a banking system is to move money (possibly a lot) quickly, without physical exchange, for the maximum number of goods and services. States also want to control a currency for their fiscal policy, and they want to be able to go into debt.
Established crypto fails the maximum number, fiscal policy and debt criteria. As soon as you introduce mandatory physical exchange via previous metals, what remains?
And yes; Monero theoretically has an infinite amount of coins. However, it has reached tail emission since about two years, meaning the block reward is 0.6XMR every two minutes, which currently equates to about $65.000 per day. However, mining requires CPUs, which would need to be acquired first.
All in all, the current numbers don't make it a feasible solution.
Lol
This is not the crypto flex you think it is...
Not flexing. Its a way to make decentralized payments.
Why would they not utilize it more? I saw that Russia said they would and then they just keep talking about banks not accepting the cash.
Pass the bong brother!
Imaginary money you say.
Bitcoin has a marked capitalization of about 30 billion USD. A S-400 air defense system costs 1.2 billion USD. So you could trade 25 of those systems using the entire "supply" of bitcoin. Russia calimed to have about 450 of these systems before the war. Even if they would use bitcoin for trading military equipment, cryptocurrency simply does not have the volume to pay for a meaningful amount of equipment.
Waiting two hours for my cryptocurrency transaction to process against a third party broker "NoScamSafeTransact.ru" only to discover that I've had my wallet hacked and all my funds plundered.
Lol well this depends on the crypto used and its hard to think that bank fees of any kind would be better than to just pay the fee to speed the transaction up.
Also, presumably they would use dummy wallets and not send amounts from their cold wallet with the full amount on it.
Idk, just seems like they deserve the trouble at this point if they can't utilize the ways around it.
Paying which fee using what currency to which third party? Hell, can you even get a good conversion rate on Rubles to Yuan, by way of some third crypto broker, at this point? Seems like its the same problem (foreign brokers don't trust Russian banks to process transactions) with extra steps.
Adding a fourth point of failure in my Ruble to Crypto to Yuan transaction. What could go wrong?
Tell you what. Take $10 and convert it to Rubles. Then convert those Rubles to crypto. Then cover the crypto to Yuan. Then buy something and ship it from China to Russia. And let me know how this experiment ends. Then you can wax poetic about how only an idiot wouldn't be doing it your way.
But all this is assuming they want to convert it into another currency at all, I was thinking why not just use it in that form for international trade although some of the other comments have explained the dollar amount equivalent wouldn't be able to exist right now due to mining limits.
But why not use a combination then of crypto, precious metals, and just straight up raw currency. I mean if chinas bank doesn't want to accept it they could just ship a container with money in it directly to them right?
I mean criminal enterprises move BILLIONS all the time without banks so I don't see how its so hard for two of the larger nations in the world.
Edit: I'm guessing the conversion into the Yuan would betheissue with sending them straight up cash huh?
That's totally untrue. In fact, we've had a litany of bank scandals - some very recently - involving large scale criminal financial trafficking. HSBC, JPMorgan, and DeutchBank have all gotten flak for processing transactions on behalf of crooked clients. USB is practically legendary for their numbered accounts and anonymous transactions.
No sane country is gonna accept payment in wildcat bank money, and there's no reason to not continue to use the ruble within russia