The Russian government recently announced that they will be making their own version of a crypto coin, called the CryptoRuble. After a closed door meeting with Russian President Vladimir Putin, Communications Minister Nikolay Nikiforov announced the news to the public. The minister has said that the creation of the CryptoRuble should not be read as an endorsement, nor as an effort to legalize decentralized cryptocurrencies like bitcoin.
“I so confidently declare that we will launch a [cryptocurrency] for one simple reason: if we do not, then in 2 months our neighbors in the Eurasian Economic Community will do it,” Nikiforov said.
The minister has also said that once the CryptoRuble is issued, all other cryptocurrency mining will be banned within the country and it will be fully regulated by the Russian government. The CryptoRuble can be exchanged for regular Rubles at any time, however should the holder be unable to explain where the CryptoRubles originated from a 13 percent tax will be levied. According to the minister, all financial operations involving the CryptoRuble will be taxed, which will also be applied to any appreciation in value.
The CrytpoRuble also won’t be the typical crypto coin since it will not be open for miners. The Russian government will be the only one to issue and maintain the currency.
“It will, most likely, be a closed model with a certain volume of regulated emissions,” Nikiforov stated.
While the CryptoRuble might run on the same type of security that blockchain based coins provide, the currency will not run on the same decentralized model that has made blockchains and crypto coins popular.
“This mustn’t be a private currency, but the one, which is issued by the state, controlled by the state and enable to provide circulation of digital money in light of the digital economy,” Nikiforov said.
Some have speculated of a hybrid type network where both public and private blockchain protocols which would lead to a unified ledger powering a national digital currency. The central Bank of Russia has been testing various digital currency pilots in anticipation of a national digital currency.
Russian President Putin has expressed concern for the digital currencies, especially Bitcoin, calling for more regulation of cryptocurrencies. The Russian government has also blocked access to cryptocurrency exchange websites. The first deputy governor of the Central Bank of Russia Sergei Shvetsov said the blocked was necessary in order to protect everyday retail investors from the volatile industry cryptocurrencies has created.
“[F]irst of all, opportunities to launder criminally obtained money, evade taxes and even finance terrorism, as well as, of course, perpetuating fraudulent schemes that obviously may affect ordinary citizens,” Putin stated to Financial Times.
According to the Russia’s Deputy Minister of Economic Development, Oleg Fomichev, the CryptoRuble will be made available to international markets, stating that there is no point for the currency circulating only inside of Russia.
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