Why pay with cryptocurrency?

21.02.2022

Originally posted on Finextra

It seems that the Ministry of Finance and the Central Bank of the Russian Federation have managed to overcome the crisis known in psychology as the Kübler-Ross model. It describes five stages of dealing with a crisis situation, beginning with denial and continuing with anger, bargaining, depression, and, finally, acceptance. Apparently, this is what happened with cryptocurrency in Russia. The government has accepted that digital currencies are the new reality and stopped thinking about banning them.

As we see it, two concerns have hindered the recognition of cryptocurrencies in Russia so far:

  • The welfare of non-professional investors who could lose all their money on risky investments

  • Massive cryptocurrency use on the black market

Interestingly, when you talk to people about cryptocurrencies, they often cannot imagine any other ways to use them: in the eyes of an average person, cryptocurrencies are still considered a way to get rich quickly.

As it happens, people in countries with a developed and open financial system (and Russia certainly belongs to them) often do not think about, or rather do not know about, the fact that in most countries of the world, where the vast majority of people live, any currency purchases or currency transfers outside of the country are strictly controlled. To understand the extent of the problem, it would be enough to say that these countries include China, India, and almost all of Africa and Southeast Asia, with a combined population of over 4.5 billion.

At the same time, in all these countries (except maybe China), cryptocurrencies are legal, thus creating a situation where they become a more convenient payment method than fiat.

This is especially important for small IT companies. At UpTrader we develop software for small companies in finance, and this type of business is the most common in emerging markets.

Therefore, the legalisation of cryptocurrencies in Russia is a real gift for us. Moreover, I think that it will favour the inflow of foreign capital into Russia and the country's image. It also means that there will be more money, which means everyone will be better off.

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