Russian President Vladimir Putin is the most influential person in the blockchain industry, according to Changpeng Zhao, CEO of major cryptocurrency exchange Binance, which in a recent announcement said it added a trading pair of stablecoin Tethers (USDT) against the Russian ruble (USDT/RUB).
Putin was the first to propose a multinational cryptocurrency, along with the Eurasian Economic Union (EEU) (comprised of Armenia, Belarus, Kazakhstan, the Kyrgyz Republic and Russia) and the BRICS association (Brazil, Russia, India, China, South Africa) countries on the heels of the 2017 cryptocurrency bubble bust.
With the EU’s Trade and Economic Cooperation with China coming into effect this year, EU countries and the BRICS Business Council fully support the establishment of a multinational stablecoin backed by commodities; along with BRICS pay – a cloud platform that will connect their national payment systems through a mobile payment app.
Russia, India, and China are planning to link the national payment messaging systems CIPS of China and FMSB of Russia to accomplish this, which is a major step on the path to de-dollarization and a de-coupling from the current U.S.-controlled global banking system.
According to a local news outlet, the Bank of Russia, the country’s central bank, has already begun testing stablecoins pegged to commodities in a regulatory sandbox.
Digitalization is a priority
Russia is the world’s largest country. It is a leader in technology, a primary energy producer and exporter, with 80% of its economy depending on exporting natural gas, oil – including high Sulphur fuel oil (HSFO) – metals and timber. In Soviet times, Russia’s centralized electricity plants powered many iron curtain countries from Romania to Ukraine, and it still remains a relatively important player in the global energy system, providing 10% of global primary energy production and 16% of international energy trade.
Russia ranks fourth in the world for primary electricity production, energy consumption and in carbon dioxide emissions, as Russia is electrified 70% by hydrocarbon energy. Its CO2 emissions are almost double that of the G20 average. And recently, Russian scientists discovered a massive fountain of methane gas, emitting up to nine times the global average, bubbling from the sea floor in the eastern Siberian Sea, which is further polluting the air.
The Russian Natural Resources and Environment Ministry further acknowledged that Russia is heating faster than the rest of the world as wildfires raged across country-size tracts of Siberia.
To diversify Russia’s hydrocarbon energy intensive and dependent economy, Putin signed a decree in 2018 establishing a special “Digital Economy” state program, with digital energy infrastructure mentioned as a key component.
It also included the goal to increase the share of renewable energy sources in its Energy Strategy, so that by 2030, 4.5% of the total energy consumption would come from renewable energy sources to boost science and technology development; environmental improvement; and energy supply for isolated power systems, which in turn will grow the economy and create new jobs.
Digitalization of the energy sector as a whole, and of the power sector in particular, is part of a global trend – including in the EU and BRICS countries. According to the International Energy Agency (IEA), global investments in digital technologies are higher than in gas-fired power generation.  So far, Rosseti, Russia’s national energy grid operator with tech startup Waves, has developed and recently began testing a blockchain solution for payments for the retail electricity sector in the regions of Kaliningrad and Sverdlovsk.
Solar digital initiatives for power plants
Currently solar energy utilization in Russia is only at 0.03%, but plummeting solar energy costs and breakthroughs in high-efficiency solar cells could aid its transition to renewable energy.
Moscow-based company, Hevel, is producing solar modules with an energy conversion efficiency of 22% and is behind building solar and storage into diesel power plants, hydro plants, oil and gas refineries; as well as solar plants in EU countries, with green-finance funding from European Bank for Reconstruction and Development and the Green Climate Fund.
Hevel will audit the emissions in these solar energized facilities with the world’s first blockchain issued green certificates. Nevertheless, satellites remain a crucial and efficient instrument in providing valuable environmental data.
Solar Power Satellite (SPS) Systems
Space-based science fiction has been part of mainstream Russian literature since 1784, with Vasily Alekseyevich Lyovshin’s novel “The Newest Voyage”, which described the first Russian flight to the Moon. On October 4, 1957, Soviets ushered in the space age when the Soviet Space Agency launched the first battery-operated satellite, Sputnik 1 into an elliptical low Earth orbit (LEO) from Baikonur spaceport in Kazakhstan.
From then on, the country served as the locomotive of space age technological advancements, with the first probe to impact the Moon (1959), the first man in space (1961) and a number of other space related “firsts.”
Russia’s Znamya SPS project began in the late 1980s and consisted of a series of orbital mirror experiments that were intended to beam solar power to Earth by reflecting sunlight to increase the length of a day, with the goal of boosting productivity in farms and cities.
In 2011 Russia and India launched a scientific-educational satellite called YouthSat to study solar-terrestrial relationships. On July 14, 2017, the Russian Space Agency (Roscosmos) unsuccessfully launched Mayak satellites that focused the sun’s solar rays onto Earth. Mayak – with a built-in android tracking app – circled the planet at about 600 kilometers (372 miles) at low Earth orbit (LEO) moving in a pole-to-pole orbit. 
During the 11th BRICS Summit in November 2019, the BRICS space agencies, which are leaders in world space initiatives, agreed to build a “virtual constellation of remote sensing satellites” for various applications, including environmental monitoring and natural resource management.
Tax policy in Russia
Russia taxes 13% of CO2 emissions from energy use. According to the IMF report, Russia ranks number three in subsidies to the hydrocarbon industry at US$551 billion and holds the world’s largest natural gas reserves (27% of total). It has the second-largest coal reserves, and the eighth-largest oil reserves. Approximately 60% of the subsidies go to natural gas, with the remainder spent on oil extraction and electricity, including renewable power generators
As the warmest decade on record marked by extreme storms and deadly wildfires came to an end, a study stated that decarbonization of the energy sector is not yet on the horizon for Russia, which retains a skeptical attitude towards the problem of global climate change. The share of solar in the energy balance is insignificant and is not expected to exceed 1% by 2040 driving Hydrocarbon CO2 emissions higher and higher.
Russia ratified the Paris Agreement at the longest ever United Nations climate summit, which ended without a deal to regulate carbon markets. The major powers behind over 75% of global emissions are set to miss emissions reduction goals, with the United States pulling out to undermine the climate pact , despite its new experimental solar cell breakthrough with a efficiency of 27.3% to 32%.
Russia is taking the lead in issuing a multinational stablecoin backed by commodities, a cyber-initiative connecting some of the most promising hub of hydrocarbon rich economies stretching across Eurasia, Africa and South America.
As a result, more than 41% of the world will be using electric energy intensive Blockchain and smart contract technology. This initiative will potentially further boost science and technology development, create new jobs, improve trade efficiency among Member States by replacing other fiat currencies used in trade settlements, and create a technologically resourceful trade block that could reshape global trade via Blockchain and smart contract technology.
However if such technology is fueled by hydrocarbon energy that Member States produce and heavily subsidize, temperatures are expected to rise 3.2 degrees Celsius above pre-industrial levels by the end of the century, according to the latest emissions gap report. Russia, Brazil, China and South Africa are not on track to for a 1.5°C world.
A decisive role could be played by the BRICS in finding innovative solutions to the functioning of the current global framework, particularly in transitioning to green economies. Ending subsidies for fossil fuels could reduce global emissions 10% by 2030, the U.N. has found. And eliminating greenhouse gases over the next 20 years could help Earth avoid between 0.3 and 0.8 degrees of warming by 2050, research suggests.
About the author
Selva Ozelli, Esq., CPA is an international tax attorney and CPA who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.
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The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.