Russian stocks are in freefallthe ruble is rapidly losing value, and 50 oligarchs have collectively lost $12 billion in one trading day—all due to the latest round of American sanctions. The market’s reaction makes the British response to Russia’s poisoning of former spy Sergei Skripal and his daughter look even weaker. After Theresa May expelled Russian diplomats, the Kremlin reacted like it always does. It trolled. Through state TV, its twitter account, and, interestingly, the bond market. Gazprom and the Russian state raised billions through the British markets mere hours after the assassination attempt. The Russian sovereign debt was substantially oversubscribed leading many to highlight the impotence of the British government and the power of the Kremlin. But putting the financial trolling in context, reveals Russia is playing a weakening hand. The Russian sovereign bonds were oversubscribed by a ratio of 2 to 1—demand outpaced supply two-fold. This sounds impressive, but it’s hardly surprising given the absurd liquidity that characterizes today’s sovereign debt market. In the past year, the straw that nearly broke the Euro’s back, Greece, had an oversubscribed bond. Argentina, a serial defaulter, managed to raise a 100-year bond; meanwhile, even countries like Nigeria and Iraq have had their debt eaten up by investors desperate for any form of yield. With this context in mind, Russia’s financial “power” looks run of the mill and just a symptom of an excessively liquid market. Considering Russian bonds were oversubscribed by 3 to 1 last year, the deal is looking a whole lot weaker. At the end of the day, investors only care about getting paid back. Despite recent economic turmoil, Russia’s fundamentals are generally strong and in a good position to meet its debt obligations regardless of whether sanctions worsen. But Putin’s recent budget outlined a number of ambitious plans to keep the public happy, and new taxes, even after his election victory, are an unlikely option. Borrowing from abroad will be essential to maintaining control, and the Kremlin needs to keep investors happy to maintain access. Therefore, defaulting on debt anytime soon is a non-starter, justifying the market’s relatively sanguine take. But the bonds issued have some particularly novel details that highlight the tightrope Russia is walking. Russia inserted a remarkably ambiguous clause that allows it to pay back lenders in a currency other than the dollar (the standard for a Eurobond) for actions beyond the country’s control. In other words, Russia is having to break huge precedent in an attempt to give investors leeway if and when the sanctions do really kick in and their dollar reserves dwindle. The fact that foreign investors still bought the bonds could mean this doesn’t matter, but it also illustrates that Russia is having to adjust to an uncomfortable, sanction filled, reality. Moreover, while the Kremlin brags about British and American investors soaking it in, the opaque nature of financial transactions makes it difficult to make firm conclusions. The Kremlin was open about its efforts to provide Russian elites with investments abroad as a convenient way to get their money back home. Russians are notorious users of foreign holding companies to help with tax evasion and property protection; it is not difficult to imagine that part of the “foreign” demand was in reality Russian. Getting potentially dirty money out of London also falls in line with the British government’s current interests, so it would hardly have been rational for them to try to take action against the bonds issued. Given the state of the global market, Russia should be getting great terms, but they were average at best. The real question is what rate they would have been able to borrow at in the absence of sanctions and current political tensions. There should be little doubt that it would have been much better. Global liquidity, not Kremlin action, is keeping Russia afloat. With rates rebounding from historic lows, investor demand for such a risky debt proposition will wane, particularly as they should soon be able to realize adequate returns through safer assets. Russia’s market turmoil is another illustration that going after individuals is an incredibly effective part of today’s strategy against Russian aggression. Sanctioning sovereign bonds has remained out of bounds, primarily due to fears of spillover effects. The latest sanctions have foreign investors spooked, so they are likely dump these holdings, mitigating the Treasury’s concerns. Given Russia’s foreseeable dependence on foreign capital, and the legal tricks they are already having to play, British and American authorities are going to only have more leverage down the line if, and when, they choose to exercise it. About the author: Nikhil Kalyanpur is the Economics & Trade Fellow at Young Professionals in Foreign Policy (YPFP). He is a doctoral candidate in Government at Georgetown University where he researches the effects of financial and legal globalization on business-government relations. His work has been published or is forthcoming in a number of academic and public outlets including the Review of International Political Economy, International Organization, and the Washington Post.  

But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?

Let’s start with gold.

Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.

In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.

It turns out, common agreement is a philosophy for building shared economy.

And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.

It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.

We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.

We’ve already agreed.

Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.

Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.

In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.

Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.

This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.

But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently.  Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.

Is education more valuable than gold? What about healthcare or nutrition or clean water?

We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.

What if education was a new gold standard?

And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?

Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.

By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?

Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.

Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.

These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.

“Let us raise a standard to which the wise and the honest can repair.”  —George Washington
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.