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Russian tycoon, CEO of The Independent: Cryptocurrency can revolutionize corrupt banking systems.

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Russian tycoon, CEO of The Independent: Cryptocurrency can revolutionize corrupt banking systems.

Russian opposition figure and billionaire Alexander Lebedev published a lengthy article today in his column in The Independent, discussing cryptocurrency, blockchain, and the booming DeFi ecosystem this year. He described them as "revolutionary technologies," suggesting they could potentially reshape the global financial system and claiming plans to launch a large-scale DeFi project.

Alexander Lebedev's Background

Lebedev, a former KGB agent like Russian President Vladimir Putin, made his fortune in business after the collapse of the Soviet Union. He acquired the British media outlets London Evening Standard and The Independent and has appeared on the Forbes billionaire list.

Additionally, Lebedev has been involved in the banking industry for over 25 years. In 1995, he acquired Russia's third-largest private bank, National Reserve Bank, and in 2003, he ventured into the aviation industry by acquiring a stake in Aeroflot, the Russian international airline.

In a published essay, Lebedev discusses the corruption in the current financial industry and emphasizes that digitization, decentralized ledgers, cryptocurrencies, smart contracts, and DeFi will revolutionize the financial system.

The Corruption in the Current Financial System

Lebedev references the confidential documents leaked by the U.S. Financial Crimes Enforcement Network (FinCEN) in September, exposing numerous mainstream financial institutions involved in money laundering and other illicit activities. He points out that banks are primarily used for money laundering as global illicit money flows increase at a rate of one trillion dollars annually. He states:

Despite fines imposed by U.S. authorities for these illicit activities, the five largest international banks have laundered 2 trillion dollars in illicit funds. Bankers, fake investment institutions, lawyers, and auditors form a vast offshore financial system that operates only to launder "dirty money," with law enforcement agencies seemingly powerless to stop them.

The Class System in the Financial Industry

Lebedev points out that billions of people globally are excluded from financial services, mainly due to high costs. Banks show little interest in serving impoverished users as they do not benefit from them, exacerbating poverty due to financial system barriers.

He believes that the COVID-19 pandemic has worsened existing barriers, with endless money printing leading to currency devaluation. The expanding bubble in the stock market will eventually burst, impacting the real world as the excessive liquidity in the stock market devalues currencies, leading to a large-scale "robbery."

The Rise of Cryptocurrency

"Cryptocurrencies, once considered a joke a decade ago, have become an integral part of the financial system," emphasized Lebedev. He predicts that mechanisms, goods, services, and real estate will all be digitized in the future, incorporating decentralized ledgers. He cites various countries' engagements with cryptocurrency technology, including:

  • October last year: Xi Jinping stated that blockchain development is one of the country's most urgent tasks
  • March: Germany's Federal Financial Supervisory Authority (BaFin) recognized cryptocurrencies as financial instruments
  • April: The People's Bank of China will launch the national cryptocurrency DCEP
  • August: Germany's Federal Ministry of Finance (BMF) proposed a blockchain-based digital securities law
  • September: The Swiss canton of Zug began accepting Bitcoin and Ethereum for tax payments
  • September: The U.S. Office of the Comptroller of the Currency (OCC) released stablecoin guidelines

Lebedev uses the example of self-driving cars to illustrate how blockchain technology and smart contracts will replace service personnel in the financial sector, ultimately supplanting banks. He explains:

DeFi exists without the need for intermediary institutions like banks. Its functions are executed by smart contracts, which operate based on mathematical code, making it impossible for anyone to steal users' funds.

Launching DeFi Projects

Lebedev shares his experience participating in DeFi projects, investing $100,000, which grew by over $300 in three days. However, he notes that DeFi currently exhibits high levels of speculation:

DeFi's explosive growth is driven by rapid market participation, which cannot sustain indefinitely. Nonetheless, the underlying infrastructure offers hope for rebuilding the global financial system.

Lebedev aims to collaborate with partners to create a financial system akin to "Bank 2.0," covering currency exchange, deposits, loans, settlements, local and international remittances, all based on a platform of "borderlessness."

Lebedev concludes that the financial system is on the brink of a revolution, predicting the end of banks. While he acknowledges the controversial nature of his claims and does not expect reality to unfold exactly as he foresees, he firmly states that one thing is not up for debate: "With the current operation of the financial system, it will lead the global economy towards disaster."