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Q Elizabeth Warren’s crypto sanctions bill aims to crack down on Russia and track wallets with foreign ties. The bill enhances the US government’s ability to clamp down on Russian cryptocurrency use and also has a provision that requires US taxpayers to report certain types of crypto transactions. Will this push more people to use crypto and have them moving away from the US reserve currency?
A I actually think that all of the new regulations and laws that governments have introduced are introducing crypto to a far larger group of people. We in the crypto space believe in decentralization, and people using fiat currencies now realize how important it is to gain financial freedom.
I think the situation in Russia, in general, showed how dependency on governments and financial institutions can be harmful to individuals. A lot of people faced restrictions on their accounts and were unable to access their funds abroad because of sanctions like Visa and Mastercard being canceled. I do believe cryptocurrency shows how financial freedom is important, and instead of using fiat currencies, people are switching to Bitcoin or Ethereum and even stablecoins.
I have personally noticed the volume of people reaching out to me regarding switching to cryptocurrency and it’s not just people in Russia who have been directly affected by sanctions. Similarly, a lot of people in the US have realized how many limitations they face if they continue using a simple bank account. That’s why I feel the sanctions and new laws will bring more people to the crypto space worldwide.
Q Russia may revive Cold War era currency pact. Will this secure cryptocurrency as a long-term digital asset? Do you think this will boost cryptocurrency prices at all? Do you think this is something that will secure the longevity of cryptocurrency as a digital asset?
A First of all, if we are talking about Russia and how the situation affected ruble, which is the national currency of the Russian Federation, I had a recent article on current Russian activities, and I mentioned that Russia was the eleventh-largest country by GDP (gross domestic product). I don’t believe there is a way you can impose sanctions on a country that is the eleventh major economy in the world without impacting the rest of the world.
We are seeing this with local businesses in the US and Europe, with a big impact on the trade of goods and services and business settlements happening with Russia. I’ve had friends in Europe reaching out, asking do I think this situation is going to affect small businesses because their largest market share was Russia and Ukraine and found themselves unable to do any transactions with both Ukraine and Russia.
With Russia removed from the global financial system, many of them started switching to cryptocurrency because that’s the only way they can have cross-border transactions without any limitations. Russia recently asked Europe to pay for oil in rubles in response to the international sanctions, and we will still see those small businesses will not be switching into rubles right away. We still have the US dollar used for cross-border international settlements, and the only way for the rest of the market to trade easily is of course cryptocurrencies that are not regulated.
Q Will this bring more people to invest in cryptocurrency by signaling another big shift in investing?
A There are a lot of funds and traditional financial institutions that are moving into cryptocurrencies. If we look at a list of major Bitcoin holdings, we will see the US, China and El Salvador obviously where Bitcoin was recently introduced as a legal tender. A lot of hedge funds and investment banks had to switch to cryptocurrency as they couldn’t miss out on this opportunity when there’s an obvious investment value in the crypto market.
In terms of how it’s affecting ordinary people and retail investors, I would say that all of the news is generally having a positive impact on the crypto market, as people are following the traditional financial institutions, imitating their investment strategy. But at the same time, many people understand the need for decentralization, and I think many factors are driving people toward crypto adoption, and we don’t need investment banks to do so?
Q How do you think we can start thinking more long-term instead of creating things for a short-term and quick profit? How does the current market allow for long-term positive innovation?
A That’s a very good question. First of all, I do believe that scams are always going to exist, and it’s not just in the crypto market. If we look at previous hypes in the market, it was a similar situation with people jumping ahead when they see an investment opportunity for quick money. It’s very hard to eliminate scams from a market. Whenever we have hype, people will be building projects for short-term profit even if it’s not a scam.
At the same time, I think the cryptocurrency market has begun maturing a little, if we compare today with 2017 when there were many projects being stamped every day and people just replicating the same ideas, using similar whitepapers. And right now, I think there are a lot of projects that have already seen the hype in the market when they are building an idea using a popular technology.
However, I think this technology can help to build a long-term project and completely redesign the ticketing industry, bringing more edge and art to the space. I have noted recently that the majority of investors are becoming more conscious of choosing projects that can overcome this hype and survive.
Q Do you think that the stigma of the scam is what’s stopping the average person from entering the space? Or do you think that it’s something else?
A I don’t feel it’s the case anymore perhaps in 2018, yes, when people didn’t want to deal with crypto and blockchain projects. Right now, I would say entrepreneurs understand the value of our technology, and a lot of retail investors are starting to understand the value of cryptocurrencies.
I have noticed a big change from friends outside of the crypto space who never grasped the field that I work in, thinking it’s a scam. Now, they’re asking me for help setting up crypto wallets, etc. So, people are now seeing the value of decentralized financial freedom and are joining the community.
Elena Obukhova is an entrepreneur, business strategist, crypto and NFT expert and a keynote speaker who published more than 30 articles in the space and was featured as one of the most powerful women in blockchain several times. Elena is a founder and CEO of FlashBack.one, the first NFT ticketing platform built on Avalanche. Elena is also a founder at Fintech Advisory Services (FAS), a global consulting ecosystem that offers a full cycle of marketing and business development to scale businesses.
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