Russia keeps focusing on cryptocurrency more. Such a conclusion comes out of the report that the country’s President, former KGB foreign intelligence officer, Vladimir Putin allegedly authorized Russian state agencies to develop a national digital currency called cryptoruble. Citing Moscow executives, The Financial Times also informed that the goal of creating this crypto coin is to skew the economic sanctions which have been imposed on Russia by foreign countries after its annexation of Ukrainian Crimea back in 2014.
Though it may seem that Russia is actively aspiring to conquer the world of cryptocurrency, in reality, there are still lots of obstacles for the country to overcome. For example, the Russian finance ministry, as well as its Central Bank, have shown their incredulity about the national digital coin. Meanwhile, Putin’s advisor claimed that Russia is not ready for running the state-owned crypto exchange.
Avoiding Sanctions Thanks to Cryptos
Russia could be searching for means to overcome international financial sanctions, mainly through the use of national cryptocurrency. According to FT, Putin’s economic aide Sergey Glazyev recently claimed that the upcoming “cryptoruble” could be a useful instrument for the Russian state, as it would help the country’s financial establishments to pay off their counterparties in any spot of the world despite the western economic restrictions.
The Russian economic advisor also stated that this currency wouldn’t be any different from the real country’s money but it would be controlled uniquely. The FT emphasized that thanks to the “cryptoruble” Moscow would be able to trace every step of it.
It is perceptible that within the past three-four years the development of the Russian economy has been hindered by the western sanctions, imposed on the country due to its illegal acts on the territory of Ukraine as well as in the frames of the investigation concerning Russia’s alleged interference in the 2016 US elections.
According to The Hill, lots of Russian officials, diplomats, entrepreneurs and the Russian President’s associates have faced sanctions from the US mainly after the Crimean crisis in 2014. Barack Obama also intruded new sanctions on the country shortly before leaving the Oval Office. He mostly sanctioned Russian hackers and executives, who had the connection with the elections interference. In 2017, Donald Trump signed into law further economic restrictions on Russia, passed by Congress.
Russia’s Dreams on “Cryptoruble”
Earlier in autumn 2017, Putin was quite skeptical about cryptocurrencies, as he named them as probable means for money laundering, tax evasion, and terrorism supply, according to the Russian state-owned agency TASS. However, it was Putin’s initiative to issue the “cryptoruble” as Russian Minister of Communications and Mass Media Nikolai Nikiforov stated. Also, Putin ordered that Russia should create a crypto regulatory system based on the experience of foreign countries.The legal acts regulating the turnover of cryptocurrencies in Russia are expected to be ready by July 1, 2018.
Meanwhile, by now, the Russian Ministry of Finance and the Bank of Russia have already presented a project of digital technologies regulation in the financial sphere. According to Deputy Finance Minister Alexei Moiseev, regulators have developed a framework document that establishes basic definitions and approaches to the control of digital assets.
According to the Russian draft law project, the cryptocurrency would be defined as the type of digital asset created and accounted for in the distributed register of digital transactions by the participants of this registry following the rules of its conduct. At the same time, еру Deputy Chairman of the Central Bank Olga Skorobogatova pointed out that no cryptocurrencies would be used in Russia for settlements or payments on a par with the ruble.
Is Russia Ready For The National Digital Coin?
Despite the encouragement from Putin’s side, there are still lots of controversies regarding “cryptoruble”. Earlier Russian Central Bank presumed that Bitcoin and its ilks could put consumers at risk. Meanwhile, the country’s Ministry of Finance has suggested that government criminalize cryptocurrency mining.
Both these establishments equally negatively assess the prospects for the creation and issuance of the “cryptoruble”. Russian Deputy Finance Minister Alexei Moiseev once claimed he saw no need for the issuance of this national crypto coin. He also suggested the creation of the “cyber-ruble” instead.
Besides, German Klimenko, who is Putin’s advisor, last year November, claimed that it could have been too early to talk about the establishment of the Russian state-owned crypto exchange due to the lack of legislation in this field.