Russia Will Buy $10 Billion in Bitcoin, Ditch US Dollar and Become Huge Crypto Whale: Russian Economist

According to a new claim from a Russian economist, the world’s 12th largest economy is about to pour $10 billion into Bitcoin.

Vladislav Ginko, a lecturer at Moscow’s Russian Presidential Academy of National Economy and Public Administration, says US sanctions are forcing Russia to diversify.

 Ginko told the Australian crypto outlet Micky that at this point, he believes Russia has no other option.

“US sanctions may be mitigated only through Bitcoin use. Because of US sanctions, Russia’s elite is forced to dump US assets and US dollars and invest hugely into Bitcoins. The Central Bank of Russia sits on $466 billion of reserves and has to diversify in case there is limited opportunities to do it.”

A new report from Forbes highlights the impact that US sanctions are having on Russia.

“Sanctions and isolation are having an impact on the Russian economy. Although Russia is not a big exporter to the U.S., canceled energy and defense contracts in Europe coupled with bans on financing Russia’s key lenders have had an impact on the economy. What else can explain the lackluster growth story in the country since 2014? Even higher oil prices have done little to lift the Russian economy.”

In July, the state-sponsored Russian news outlet RT said President Vladimir Putin gave a speech highlighting the need for alternative reserve currencies in global trade.

“Regarding our American partners placing limitations, including those on dollar transactions, I believe is a big strategic mistake. By doing so, they are undermining the trust in the dollar as a reserve currency.”

At that time, Putin said Russia has no plans to stop using the US dollar unless it is prevented from doing so.

In Venezuela, President Nicolas Maduro announced that the country’s newly created digital asset, the Petro, is an official government currency. The Petro is supposedly backed by the country’s oil reserves. After its launch, US President Donald Trump prohibited Americans from investing in it, claiming it was designed to avoid US sanctions.


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Author: Daily Hodl Staff
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New US Banking Rules Might Push People to Cryptocurrencies, Weiss Ratings Says

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Following the Federal Reserve’s meeting to rewrite some of the Volcker rules for banks, Weiss Ratings considers that Americans may be inclined to purchase cryptocurrencies to ride out any potential resulting financial crisis.

On May 30, the Federal Reserve will meet to discuss the modification of the Volcker rule, which stops banks from trading in volatile markets for profit using funds that are protected by deposit insurance.

Weiss Ratings is raising the alarm on this particular meeting, saying that “US banking regulators are getting ready to water down the Volcker rule,” and that this might provoke more Americans to invest in cryptocurrencies as savings instruments.

“They want to make it easier for megabanks to take big risks with other people’s money—our money. They want to give banks the green light to trade more of the same kinds of assets that helped cause the 2008 debt crisis.”

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Both Martin Weiss and Juan Villaverde—Weiss Ratings’ crypto guru—believe that this could lead to instability in American financial markets like that in 2008 when banks attempted to profit from subprime loans due to incentives that came under the guise of “affordable housing for everyone” that were passed in the 90s.

After the housing bubble burst and prices started crashing, the banks made major losses and the Federal Reserve had its hands tied. It had to either bail them out or let a large part of the global financial system collapse.

“There was, and still is, an over-reliance on megabanks—not only as depository institutions and custodians, but also as a major source of liquidity for global capital markets,” Weiss and Villaverde added.

The solution to this, according to them, is a movement towards cryptocurrencies as a means for savings.

“Cryptocurrencies do such a fundamentally better job as a safe depository, it’s difficult to envision a world in which this technology does not become a game-changer for money and banking,” they said.

This is much in line with the opinion of a majority of American millennials, 65% of which consider Bitcoin a safer investment than personal savings accounts offered by banks.

Despite all of the red flag waving, however, banks have historically found the Volcker rule to be confusing. The Fed’s meeting on May 30 could simply result in a rewrite of some of the restrictions that results in clarification.

A complete or even partial repeal of the rules isn’t likely, as the 2008 global crisis is still fresh in the minds of regulators, many of whom were present when Lehman Brothers floundered.


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Author Miguel Gomez
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Dollar-pegged cryptocurrency TrueUSD launches on Binance

TrueUSD, a cryptocurrency whose value is pegged to that of the dollar, has signed a deal with Binance, one of the world’s largest cryptocurrency exchanges in terms of volume.

Starting May 18, TrueUSD (ticker: TUSD) will be listed on Binance, allowing traders to exchange it for Ethereum, Bitcoin, or Binance Coin.

Launched in March by San Francisco-based start-up TrustToken, TrueUSD is a so-called stablecoin — a cryptocurrency whose value is pegged to the value of a traditional asset, in this case the U.S. dollar. TrustToken claims that TrueUSD is fully collateralized with fiat money, held in escrow accounts accessible by trusted third-party fiduciary partners. The company says it’ll publish monthly reports on the state of its bank account holdings, and will subject them to ongoing audits.

“Having U.S. dollars as collateralization held in escrow in addition to our regular accounting reports provides traders with reassurance that they can trust in TrueUSD,” Rafael Cosman, co-founder and CTO of TrustToken, said in a statement.

In other words, every single TUSD should always be redeemable for U.S. dollars, at a 1:1 ratio, with a pretty good degree of certainty that the issuer actually has the dollars to back them up.

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While the idea of a cryptocurrency based on an actual currency sounds ironic — the whole point of crypto was to develop an alternative to real-world, centralized financial systems — the development is important for the space. Stablecoins provide traders and investors with a certain degree of stability in the volatile world of cryptocurrencies, without the need to sell cryptocoins for straight-up cash, an action that often has tax consequences.

So far, the dominant stablecoin has been Tether (ticker: USDT), which is connected to cryptocurrency exchange Bitfinex. If you ask Tether, the company, USDT is fully backed by fiat currency assets in the company’s reserve account. But there’s a problem with that claim: There are $2.2 billion USDTs in circulation (according to CoinMarketCap), and the company has never been publicly audited. This, in turn, has led to speculation that USDT is not adequately collateralized, and that Tether is printing new USDTs out of nothing.

The notion that Tether might collapse and cause a big disruption in the cryptocurrency market is known in the space as “Tether FUD” (with FUD standing for “Fear, Uncertainty, Doubt).

Now, however, traders on Binance — which is currently the second-largest cryptocurrency exchange (behind OKEx), with $1.8 billion in trading volume in the last 24 hours — have a choice to park their assets into TUSD instead of USDT. This should ease the fear of a possible Tether collapse as well as give traders the option to hedge their bets and diversify across two USD-pegged coins.

TrueUSD is already available on cryptocurrency exchange Bittrex, where it launched in March. But Binance is approximately seven times bigger than Bittrex in terms of trading volume, and it’s the second largest Tether market, making this new partnership far more important.

There are currently roughly 12 million of TUSDs circulating, representing an equal amount of collateralized dollars. The demand on Binance will likely be far bigger than that, but Cosman says this won’t be a problem.

“Right now, there are numerous external parties depositing additional funds into the TrueUSD escrow account to purchase tokens and trade them on the exchanges. The market cap of TrueUSD can grow by millions or tens of millions per day; as soon as the US dollars arrive in the escrow account to collateralize new tokens, we mint those tokens and issue them,”.

TrueUSD and Tether aren’t the only stablecoins around, but they’re the biggest ones that took the simple but capital-intensive route of backing the entire token supply with actual fiat reserves. Alternatives such as MakerDAO’s Dai or Havven’s nomin rely on reserves in cryptocurrencies such as ether as well as complex algorithms that keep the price in place.

These alternatives are far more decentralized than a solution such as TrueUSD, but they aren’t available on the largest exchanges yet.

There are, however, some powerful competitors on the horizon; just days ago, Circle raised $110 million to launch a stablecoin pegged to the value of U.S. dollar.

“Having U.S. dollars as collateralization held in escrow in addition to our regular accounting reports provides traders with reassurance that they can trust in TrueUSD.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Stan Schroeder
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