It seems like a lifetime ago when Ethereum founder Vitalik Buterin was in Moscow, wining and dining the Russian elite. He sat on stage next to President Vladimir Putin and forged relationships with government agencies. All seemed well.
That is, until yesterday.
On Tuesday, Putin warned against the growing influence of cryptocurrencies. He cited “opportunities to launder funds acquired through criminal activities, tax evasion, even terrorism financing, as well as the spread of fraud schemes” as his main concerns.
But there were even harsher words from his ministers. Bank of Russia Governor Elvira Nabiullina said, “We are totally opposed to private money, no matter if it is in physical or virtual form.” At the same time, her deputy governor called cryptocurrencies a “pyramid scheme.” (Source: “Putin Backs Cryptocurrency Rules and Warns of ‘Serious Risks’,” Bloomberg, October 10, 2017.)
Maybe these comments will devastate our Ethereum price forecast…but it is unlikely.
Note the use of specific terminology like “private money” and “financing.” These officials are clearly talking about the payments side of blockchain technology, which relates more to Bitcoin than to Ethereum. Isn’t that good for Ethereum?
Its core value is in running decentralized applications across its network, which is not something ruled out in any of the recent comments. Russian authorities appear to be friendly to that kind of blockchain—it’s the payments-focused ones that they seem to mind.
If the “regulatory environment” ends up favoring Ethereum, we could see a net positive impact on ETH prices. But till those rules become public, there is a possibility of investors panicking at this bit of Ethereum news.
Whatever happens next, the Ethereum to USD exchange rate still looks strong at around $302.20. It advanced only 0.19% in the last 24 hours, but at least that movement was to the upside.
Also Read: Hold on to Ethereum for the Long Term