Russia Announces National Cryptocurrency

Russia Announces National Cryptocurrency
Russia Announces National Cryptocurrency

The country announced that they will soon create the state-backed CryptoRuble

Russia recently announced that they will issue their own cryptocurrency, the CryptoRuble. This announcement has finally brought an end to speculative rumors surrounding the country’s future approach to blockchain technology and cryptocurrencies.

However, while the CryptoRuble will have a similar structure as Bitcoin and Ethereum, it seems unlikely that the CryptoRuble will share the decentralized features of other cryptocurrencies.

According to CoinTelegraph, the Russian Minister of Communications, Nikolay Nikiforov has confirmed that the CryptoRuble is currently in the works, although he did not release a lot of details regarding the cryptocurrency.

Over the summer, many reports surfaced which suggested that Russia was looking into creating its own national cryptocurrency. These reports came despite the fact that the Russian government voiced some strong criticisms against cryptocurrencies, calling them illegitimate surrogates for officially recognized currencies.

While very few details regarding the CryptoRuble have been released, it seems that the currency will not be mined and that it will be issued and tracked by the government. Many have speculated that these conditions completely strip the CryptoRuble from all the defining features of a cryptocurrency.

However, the CryptoRuble will be based on blockchain and have some element of decentralization, at least to the extent that it will be able to prevent online fraud. Rubles and CryptoRubles will be allowed to be exchanged freely, however, it is still unknown via which platform they will be exchanged.

The underlying ideal of blockchain-based cryptocurrencies is to stimulate online economic activity in such a way that it wouldn’t rely on the foreign money market, or third party transaction brokers. According to Nikiforov, if Russia didn’t do it, its European counterparts are likely to beat them to it.

According to reports, every CryptoRuble intended for exchange will require a proof of origin, such as a document confirming the retail transaction or service provided. This policy will ostensibly be implemented in an attempt to prevent money laundering, terrorist financing, and currency manipulation. Since the government does not want to stifle in the industry with over-regulation, however, all CryptoRubles without documentation will be subject to a 13% tax.

The taxation will also be applicable to all appreciation in value. Currently, it’s still unclear exactly if and how the CryptoRuble will be tied to the country’s fiat currency.