Russia’s Crimean Peninsula to Embrace Cryptocurrency

The Crimean Vice Prime Minister has hinted that his region is considering adopting an official cryptocurrency to help attract global investment in one of Russia’s historic resort regions. Currently tourism and agriculture, including Crimea’s rejuvenated wine industry make up the biggest civilian components of the local economy, but all of that could change if a ‘Crimeacoin’ became a new reality.

The Russian Finance Ministry is currently considering making the Pacific coast city of Vladivostok and Oktyabrsky Island in the Baltic Sea Kaliningrad region special economic zones for such mega cryptocurrency centres. These strategically placed locations will mean that Russia’s major crypto-trading centres will be easily accessible to both the wider Asian world and wider European world. If Crimea became a further crypto-region, it would effectively create a golden triangle of crypto-friendly mining and investment regions in Russia with Crimea being Russia’s gateway to the Black Sea and west Asia.

It is not clear if a would-be Crimeacoin would work in tandem with the soon to be released Cryptorouble, but in any case, it represents the entrepreneurial spirit necessary in making Crimea a special economic zone along the lines I proposed earlier this month.

As I wrote on the 19th of February: 

Crimean politicians are naturally excited about the future economic potential of their idyllic peninsula. With its central Eurasian location on the Black Sea, natural beauty and its many resort towns, Crimea is an ideal place to begin an economic initiative designed to play on the regions natural attraction.

Recently, Andrey Nazarov, the chairman of the Yalta International Economic Forum Foundation has stated,

“We have no doubts that in 20 years, Crimea will be a second Monaco,” the chairman told Sputnik, later going on to say that “Businessmen in general, regardless of if they are Russian or European, people are very often very wise, pragmatic and therefore want to fill those niches which are currently free, ahead of time. Of course, in 20 years there will not be an opportunity like there is now. Therefore, many are willing to take risks, even during sanctions to act and invest in Crimea”.

While these words may seem ambitious, Crimea could actually become something much more than the asset shelter playground that is Monaco. Crimea has the potential to be one part bustling resort and one part mega-shipping centre along One Belt–One Road.

The way forward for Crimea is to make it the most investment friendly region of the Russian Federation. Because its landscape and amenities already make it tourist friendly, there is no reason not to expand this into both light and heavy shipping commerce. This could be accomplished by making all of Crimea into a giant free port where international goods can flow in and out with few economic restrictions.

At the same time, local and regional government can work with both Russian and foreign companies to build modern container shipping ports on the peninsula. Here, China would be an ideal partner as indeed, Beijing expressed interest in Crimea investment even prior to 2014. With China never participating in the western-centric Crimean sanctions regime, Chinese investors could easily start making long term investments in Crimea which in turn could prove to be an invaluable asset for One Belt–One Road, not least because today, Crimea has been restored to the Russian Federation which itself is China’s closest partner and a fellow superpower.

It’s strategic location means that overland routes from China to Russia as well as from the Caucuses and Iran to Russia could then be freighted to Crimea where they could be shipped out to the wider Mediterranean world via the Black Sea. In this sense, Crimea could serve as a terminus linking One Belt–One Road to the North-South Transport Corridor linking South Asia to the Caucuses and Russia.

Turkey, which has formed ever more meaningful trading partnerships with Russia in recent years, could also participate both in respect of cooperating in new Crimea to Bosphorus trade routes, as well as a direct shipping route from Crimea to Turkey’s own Black Sea coasts.

With the China-Pakistan Corridor giving East Asia trade a viable route to the Indian Ocean, an inland route from China to Russia as well as one from the  Caucuses and Iran to Russia, would put Crimea at the centre of trade to the wider Mediterranean and further to west Africa’s Atlantic coast, all while avoiding the politically tumultuous Middle East.

Thus, a Crimean trading terminus linking the wider East and central Asian economies to the Mediterranean and west Africa would guarantee a safe shipping route that avoids areas of political instability, as no one in Asia realistically believes the propaganda from economically backward east European countries which claim that somehow Russia’s Black Sea region is anything but stable and secure.

Crimea suffered decades of post-Soviet neglect under successive failed Kiev regimes and today, many in Crimea are eager to make up for lost time. The fact that the US and EU have sanctioned Crimea adds to the incentive for Crimeans to look for partners in the new economic centre of the world that is East Asia.

A Sino-Russian partnership could easily turn Crimea into not just a bustling tourist destination but into a key point along One Belt–One Road, one that guarantees security, easy access and a free flow of goods between the Atlantic and Pacific. This win-win method would be good for not just Crimeans but for all participating nations in such an endeavour.

Today’s announcement hints at an early stage embrace of cryptocurrencies in order to harness the international efficiency of blockchain to attract new investors as well as a way of getting an internationally friendly currency into a region that remains under economic sanctions from the EU, US and their allies.

 


 

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