Russian Bank Skeptical Of Proposed Cryptoruble

Russian Bank Skeptical of Proposed Cryptoroble
Russian Bank Skeptical Of Proposed Cryptoruble

While Putin intends to use the proposed cryptoruble as a means of evading international sanction, the Russian central bank remains skeptical of this endeavor.       

According to various reports, the Russian president, Vladimir Putin, ordered a team of experts to create the cryptoruble as a means to evade several economic sanctions imposed by the international community. According to Putin’s economic adviser, the cryptoruble will be impossible to mine. However, the Russian central bank is still demonstrating signs of reluctance when it comes to the Russia-backed digital currency.

According to The Financial Times, Putin has been demanding the creation of the cryptoruble has a means to evade economic sanctions. In addition, the president’s economic adviser, Sergey Glazyev, noted during a recent government gathering that the proposed cryptoruble would be a unique and useful way to bypass the crippling international sanctions.

The Financial Times quoted Glazyev when he stated that the cryptoruble would allow Russia to conduct transactions with their counterparties worldwide, without being impacted by the sanctions. Glazyeve also noted that the cryptoruble would essentially be the same as the Russian fiat currency, the rouble, but that the digital currency’s circulation could be more controlled.

Last year October, Putin gave the order to establish a state-backed digital, which has since been dubbed as the cryptoruble.

Following Putin’s demand, the Russian Minister of Communications and Mass Media, Nikolay Nikiforov, submitted the very first cryptoruble proposal a week later.

A month later, the Russian Deputy Minister of Finance, Alexei Moiseev, dropped some cryptic hints about certain details pertaining to the proposed digital currency. Moiseev noted that the cryptoruble may not technically function in the same way as regular cryptocurrencies. Moiseev added that perhaps the name should be changed to the cyber-ruble.

In December 2017, Glazyev delivered a modified proposal for the cryptoruble. The proposal suggested that the digital currency could be used to conclude settlements between the state and several organizations. According to a local media outlet, Kommersant, Glazyev stated that the cryptoruble would be exclusively issued by state-appointed authorities and that the digital currencies will not be possible to mine.

Glazyev added that the cryptoruble will offer a discrete stream of monetary alternatives that offer the government protection from theft or fraud. Glazyev also noted that the cryptoruble will be capable of being applied to any function traditionally performed by fiat currency.

Despite Glazyev’s several statements on the matter, the Bank of Russia, as well as the finance ministry, seems somewhat skeptical. Both parties have noted before that they don’t deem the cryptoruble useful or necessary.

In an earlier meeting which including a presentation regarding the bill for cryptocurrency and ICO regulation, Moiseev stated that the Ministry of Finance does not consider the cryptoruble a top priority. The local media outlet, Interfax, also quoted Moiseev, when he stated his confusion as to why exactly Russia needs a cryptoruble.

In addition, the deputy governor of the Bank of Russia, Olga Skorobogotova, noted that the bank has advised against the cryptoruble, especially considering the context of Russian macroeconomics.

However, the Bank of Russia also seems to be eager to benefit from the underlying financial technology. Skorobogotova revealed that the bank is investigating the possibility of creating a supranational cryptocurrency that could operate within the Eurasian Economic Union (EAEC) or BRICS.

According to Skorobogotova, the bank believes that cryptocurrencies can be hugely useful, not within a single country, but rather within a wider area.