Russia is set to be the world’s first nation to adopt an official cryptocurrency, ending months of speculation about the country’s vision for the technology. While the move signifies a Russian embrace of digital currency, it is likely that the CryptoRuble will not be truly decentralised like its rivals such as Bitcoin and Ethereum.
Indeed, according to CoinTelegraph – which cites local news sources, which in turn cite Nikolay Nikiforov, the Russian Government’s Minister of Communications – the CryptoRuble cannot be mined, but instead will be issued and controlled by the authorities. CryptoRubles can however be exchanged for regular Rubles at any time, but if the holder cannot explain where their digital currency has come from, they will be taxed 13 percent.
These strictures could allow the Russian Government to harness the CryptoRuble to stimulate the economy from within the country, without relying on foreign money markets or third-party transaction brokers. Authorities can also more easily track the cryptocurrency if it is regulated, monitored and taxed.
Strong conditions might also be the reason behind Putin’s grudging acceptance of cryptocurrency. Only last week news outlet Reuters reported that the Russian President branded digital currencies as carrying ‘serious risks’ and susceptible to use in ‘unlawful activities’. Russia’s Central Bank mirrored Putin’s statements, First Deputy Governor Sergey Shvetsov telling a conference in Moscow the same day: “We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors)”.
Interestingly, Putin previously endorsed cryptocurrency heavyweight Ethereum earlier this year, after meeting privately with its Co-Founder Vitalik Buterin. The pair met at the International Economic Forum held in St Petersburg, and according to Kremlin Press Secretary Dmitry Peskov, Putin and Buterin remained enthusiastic about how cryptocurrencies could establish new business relationships in today’s Russia.
The news also means that Japan’s prospective J-Coin could be pipped to the post.