FINANCE, Interviews

Igor Nikolaev: Permission to pay in cryptocurrencies is not a panacea

From September 1, the Central Bank launched an experiment to create a platform for the use of cryptocurrencies in international settlements – the State Duma adopted the corresponding law in the first reading. What it is necessary for, Invest-Foresight asked Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences.

Igor Nikolaev, Chief Research Fellow of the Economics Institute at the Russian Academy of Sciences. Vladimir Trefilov / RIA Novosti

– So, the use of cryptocurrencies in international settlements. The Central Bank seems to have resisted the very recognition of the term “cryptocurrency” for a long time. Why now it has changed its mind?

– In Russia, there have indeed been serious changes in terms of payment and settlements under contracts with foreign counterparties. Payments are now in question, in recent months this problem, moreover, has been aggravated. This, by the way, already applies not only to payments with Chinese counterparties, but already with Turkish ones, and with other countries too.

It is becoming more and more difficult to make payments under foreign trade contracts. Secondary sanctions are increasing. But somehow these payments still need to be made, and therefore they saw salvation in cryptocurrency. Therefore – green light for cryptocurrencies, green light for mining.

– The world has adopted the practice of marking crypto wallets and individual coins for the purposes of sanctions and anti-money laundering legislation. As soon as the cryptocurrency goes abroad, it will immediately be labeled as related to Russia, and the platform itself will fall under sanctions. What could be the point then?

– Yes, on the one hand, cryptocurrencies provide a certain opportunity to solve the problem of payments. As for the opposition, cryptocurrencies still have more opportunities to provide payments than fiat currencies.

Of course, outwardly it seems not even just to specialists, but although to those who follow this segment of the market that feature of cryptocurrencies are certain competitive advantages. It is, of course, possible to “paint” them so that it is clear whose unit of payment it is, but still it is easier to counteract this, at least  now, than if payments were made in fiat currencies.

– What benefit can this decision bring?

– This is a rather complicated process. Yes, we gave the green light to cryptocurrencies, and this will give Russia certain positive opportunities in terms of making payments. But there is no doubt that this will also be opposed in order not to let our country really use this channel.

This will continue, I believe. We will find new ways to secure payments, and “on the other side” they will look for new ways to counteract this. The potential, in a word, is inexhaustible.

Of course, there are advantages for us in this decision, but they should not be exaggerated either.

– What future do you see for cryptocurrencies?

– We remember the main objection of the Bank of Russia regarding cryptocurrencies that the issue should be controlled and secured. In terms of cryptocurrencies, this process is “omitted,” and this is a problem.

To be honest, I have not yet fully imbued with the idea that cryptocurrencies can become a full-fledged replacement for standard payments. And I think that this idea will work, as they say, just temporarily. Before some serious crisis related to the cryptocurrencies themselves will happen. I will be conservative, these units are still not quite the currency in the form in which it should be and be present on the market as a means of payment.

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