community.apan.org/wg/tradoc-g2/fmso/ Foreign Military Studies Office Volume 8 Issue #1 OEWATCH January 2018 FOREIGN NEWS & PERSPECTIVES OF THE OPERATIONAL ENVIRONMENT CRYPTOCURRENCIESCRYPTOCURRENCIES ANDAND BLOCKCHAINSBLOCKCHAINS MIDDLE EAST, NORTH AFRICA 23 China in the “Post-American” Middle East 24 Russia’s “Victory Lap” in the Middle East 26 Will Russia Establish a Military Base in the Red Sea? CRYPTOCURRENCIES AND BLOCKCHAINS 28 What Next in the Renaissance Dam Conflict? ASIA-PACIFIC 48 ASEAN Leaders Discuss Security Challenges 3 The Kremlin’s Cryptocurrency Sanctions Bypass 29 Algeria Rejects Joining Saudi-Led Terrorism Coalition 49 China Unveils World’s Fastest Amphibious Assault Vehicle 4 Testing Crypto in Separatist Regions 30 Iran: Khamenei Speaks on Views toward America 50 Rohingya Crisis: Will China’s Mediation Succeed? 5 The Cryptoruble: Not Exactly a Hard Currency, Not Exactly 31 Iran: New Military Budget Proposed 51 China’s Relationship with Chile the Russian Bitcoin 32 Iran’s Amphibious Aircraft from Russia 52 China Considers “Defensive Mobilization” for Potential War on 6 The Cryptoruble: A Test-Tube Baby among Natural Korean Peninsula Cryptocurrencies, or Just an Electronic Ruble? AFRICA 7 Questions Surrounding the Cryptoruble 33 Drivers of African Instability 8 Cryptocurrency Mining: A Hot Topic in the Energy Sector 34 Somalia: Who Will Fill the Security Void after AMISOM? CAUCASUS, CENTRAL AND SOUTH ASIA 9 China Aims to be Global Leader in Blockchain Technology 35 Women in al-Shabaab: Why They Join, What They Do 53 Kazakhstan’s New Military Doctrine 10 A Chinese Insider Analysis of Bitcoin in North Korea 36 Gunsmithing: A Lucrative Business in West Africa 54 India’s Reaction to Russian Security Cooperation with Pakistan 11 North Korea Cyber Crime Shifts Gears 37 Eritrea: Cracks in “Africa’s North Korea” 56 Georgia: A Counterterrorism Operation Raises Questions 12 Malaysia Eyes New Era of Cryptocurrency and Terrorism 38 Boko Haram’s Soft Targets: Refugees and IDPs Financing 39 Inside the Mind of Mali’s Mausoleum Destroyer 13 Malaysia Seeks to Regulate Cryptocurrencies RUSSIA, UKRAINE, EUROPE 57 The Wagner Private Military Company 13 Vietnam Bans Bitcoin 58 Russia Ponders the Creation of a Russian STRATCOM 14 Concerns about Cryptocurrency and Terrorism Financing in LATIN AMERICA 60 New Artillery Rounds Will Extend Russian Artillery Range Indonesia 40 Argentinean Submariners Lost at Sea 61 Schemes to Skirt Sanctions 15 The Market for Bitcoins in India 41 Debating the Impeachment of Former Argentinean 62 Can Russia Mobilize Military Medical Care? 17 Digital Currencies in the Middle East and North Africa President 63 Strengthening Military and Historical Claims to Crimea 19 Turkey Grapples with Blockchains and Cryptocurrencies 42 Who Is the President of Honduras? 64 Permanent Iskanders in Kaliningrad 20 Blockchain’s LATAM Anti-Corruption Promise 42 New Old Chilean President Not Socialist 65 Deciphering Russian Weapon Developments 21 Venezuela’s New Crypto-Oil Money 43 Electric Substation Event in Venezuela 66 In the Rucksacks of the Sofrino Brigade: Snickers and Pork Fat 22 Gold Mining in Venezuela 44 The FARC’s Political Aspirations 45 Colombia to Train 20,000 Police Officers in Central America 67 Russian NBC Arctic Training in 2017 46 Military Cooperation in South America 69 Russian Military Vehicle Winterization Challenge 47 Brazil Hosts First Ever Humanitarian-Logistics Exercise in South America approved for public release; distribution is unlimited The Foreign Military Studies Office (FMSO) at Fort Leavenworth, Kansas, is part of the US Army Training and Doctrine Command G-2, whose mission is to Understand, Describe, Deliver, and OEWATCH Assess the conditions of the Operational Foreign News & Perspectives Environment. For over 30 years, FMSO of the Operational Environment has conducted open source research Volume 8 | Issue 1 January | 2018 on foreign perspectives of defense and security issues, emphasizing those topics that are understudied or unconsidered. Regional Analysts and Operational Environment Watch Expert Contributors provides translated selections and commentary from a diverse range Middle East, North Africa Karen Kaya Michael Rubin of foreign media that our analysts Lucas Winter and expert contributors believe will Jacob Zenn give security professionals an added Africa Robert Feldman dimension to their critical thinking Jacob Zenn about the Operational Environment. Latin America Geoff Demarest Brenda Fiegel The views expressed in each article are those of the author and do not represent the official policy or Asia-Pacific Dodge Billingsley position of the Department of the Army, Department Fen Chen of Defense, or the US Government. Release of this R. Evan Ellis information does not imply any commitment or intent Cindy Hurst on the part of the US Government to provide any Sudha Ramachandran additional information on any topic presented herein. Jacob Zenn The appearance of hyperlinks does not constitute Caucasus, endorsement by the US Army of the referenced site Central and South Asia Matthew Stein or the information, products, or services contained therein. Users should exercise caution in accessing Russia, Ukraine, Europe Chuck Bartles hyperlinks. Ray Finch The Operational Environment Watch is archived Les Grau and available at: https://community.apan.org/wg/ Mica Hall tradoc-g2/fmso/. Editor-in-Chief Tom Wilhelm Editor Karen Kaya Design Editor Lucas Winter ON THE COVER: Matrix. Source: By Comfreak, https://pixabay.com/en/matrix-code-computer-pc-data-356024/, CC0. CRYPTOCURRENCIES AND BLOCKCHAINS The Kremlin’s Cryptocurrency Sanctions Bypass OE Watch Commentary: According to the accompanying article, “the Kremlin is considering cryptocurrencies “The cryptoruble is an excellent countermeasure…” as a way of bypassing the international sanctions that Source: Nikolay Nelyubin interviews businessman Yevgeniy Lifshits, are affecting the country’s defense capabilities.” Up until “Бутеринки спасут Россию и сделают Путина президентом (‘Buterinki’ now, Russia’s defense industries have resorted to “import Will Save Russia and Make Putin President),” Fontanka.ru, 25 September substitution” to ameliorate the affects of sanctions by either 2017. http://www.fontanka.ru/2017/09/25/055/ developing their own products or acquiring necessary The Kremlin is considering cryptocurrencies as a way of bypassing the components via other countries. However, sanctions recently international sanctions that are affecting the country’s defense capabilities… imposed against major Russian defense firms may now Businessman Yevgeniy Lifshits thinks that the “cryptoruble” will come into restrict the Kremlin’s ability to sell weapon systems to foreign being very soon: Right before the Russian Federation presidential election…. customers. The brief excerpt from an interview in the Russian …[Nelyubin] At what level are these discussions taking place? Which online news outlet Fontanka.ru describes how the Kremlin ministries and sectors are worried? “is considering cryptocurrencies as a way of bypassing the [Lifshits] At the level of the VPK [military industrial complex] overseers and international sanctions that are affecting the country’s defense manufacturers. It is also being discussed at fairly high-level meetings in the capabilities.” Defense Ministry, Rostekh, and so on…. While the excerpt does not provide a detailed explanation …[Nelyubin] Aside from observing reality, what do the powers-that-be need of how the Russian cryptocurrency system will work, it does to understand? claim that such a tool will allow “Russia’s trade partners… to [Lifshits] The [United] States introduces the sanctions via SWIFT (the remain unnoticed by the United States” and thus would ensure largest international interbank system of transferring information and making that they do “not fall under the sanctions.” The article points payments -- ed.) and monitors them there too. But companies want to work, out that “such ideas have already been discussed at the level of all this wrangling is of no benefit to them. How does this work? You see, you the BRICS (Brazil, Russia, India, China, South Africa)” where have a buyer, company X, in Europe. It does not want to give away the fact it is working with you, so that it does not fall under the sanctions. Then X buys they “discussed the possibility of creating a cryptocurrency “Rucoin,” it uses this to settle its accounts with you, and you then convert the for the organization.” Even before the crisis began between profit into whatever currency you need, in China, for example. It is almost the Russia and Ukraine, the Kremlin leadership was aggrieved same as the way Iran went back to commodity exchanges when it was subject that the US dollar served as the global reserve currency. They to sanctions. It is just that today there is a new financial instrument. Drug contend that this economic advantage translates into American dealers and so on were the first to use Bitcoin. And now for the state it is the military prowess. The Kremlin regards economic sanctions way out of [a] difficult situation…. as a powerful tool in America’s hybrid warfare strategy, and [Lifshits] …And this will happen the instant that they clearly see a way of Russia has been at the forefront in efforts to weaken American avoiding the sanctions using the cryptoruble…. economic might. …[Nelyubin] Give a prediction about the timescale. When can this The Kremlin remains determined to modernize its armed “command” be expected? forces, and