In what seems to be another advancement towards a blockchain revolution, MegaFon, a large mobile phone operator, has offered a 500-million-ruble bond based on the blockchain. This is simply a cost-effective way to bypass many of the old fundraising techniques. Blockchain bonds, especially in Russia, mean they won’t have to deal with the old archaic banking system. The old banking system is being slowly whittled away, and emerging markets can finance themselves outside of this system at a much better rate. Several months ago, it was reported that the National Settlement Depository was moving to tokenize much of the Russian economy. Moving securities issuances from the Moscow exchange to the blockchain is an integral step towards tokenizing Russia and disintermediating funding protocols.
Creative financing outside of the normal waves of Wall Street is surely going to annoy the power structure. Russia will no longer be subjected to the downfalls of the SWIFT payment system. If this deal is successful, look for bigger deals in the future. As a trial run, this will allow Russia the opportunity to build out its infrastructure to support bigger capital inflows. Proper infrastructure will allow capital flow to happen naturally, rather than in major movements at random speeds. With a natural process, the Russians’ respect of capital will be unmatched, drawing in more. It will be different than today, where the U.S. and the G20 do whatever they feel like. Privilege will keep dwindling and moving East and abroad.
Adding to this interesting development, a historic meeting between Saudi Arabian King Salman Bin Abdulaziz Al Saud met with Vladimir Putin to discuss a $1 billion energy deal. The historical significance is that this is the first time a Saudi king has traveled to the Russian capital. After the meeting, it was announced that the two countries did indeed launch a $1 billion fund that would include investments in natural gas projects and petrochemical plants. Some notable parts of the global deal include Saudi Aramco signing with the Russian direct investment fund and Sibur, a gas processing and petrochemicals company in the area of oil refining, agreed to a deal as well. The meeting between the countries is critical in terms of maintaining stable oil prices and relationships, the Saudi Arabian leader stated. The two countries have never had better dialogue, and Washington should be concerned. Russia and Saudi Arabia agreed to work together on nuclear power, agriculture, investments, social development, and I.T. Saudi Arabia also agreed to import more food than before. Russia is the largest wheat producer in the world, so it’s a no-brainer for Saudi Arabia to import wheat. Another interesting piece of the negotiations is that Saudi Arabia agreed to buy $3 billion worth of Russian weapons. Saudi Arabia now has weapons from Russia and the United States. It looks as if Saudi Arabia is playing both sides now that they have S-400s from Russia. Blockchain technology, new agreements amongst old foes, and the death of the dollar are causing eye-opening developments on a daily basis. Hopefully, technology will lead humankind to the cohesiveness that we need to rid the world of ancient power structures.
Cheers,
Colin