Another Russian Official Claims Government Will Create Its Own Crypto

Blockchain, FinTech, Innovation, Investing, News, Regulation | October 16, 2017 By:

Yet another Russian official has claimed Russia will launch its own digital currency. This time, more details have emerged, indicating that the new currency will be centralized and can’t be mined.

The so-called “CryptoRuble,” as press reports have named it, has no specific timeline to its roll out. The confirmation in local Russian news reports on it came from Nikolay Nikiforov, the government’s minister of communications, but the possibility of it has been hinted at for months by various top-level officials.

Mixed messages have emerged from Russia on various existing cryptocurrencies.  Some support the existing structure, and the government has backed several initiatives, including a mining operation. But others have condemned bitcoin and other cryptos, citing their risk to average investors and their decentralized nature.

Last month, the country created Ethereum Russia with ethereum cofounder Vitalik Buterin, and Finance Minister Anton Siluanov stated that plans were in the works to legalize cryptocurrency. But other officials have condemned cryptocurrency in strong language, and have posited everything from an outright ban to stricter, state-controlled registration and regulation, to creating Russia’s own cryptocurrency.

Early reports on today’s news indicate the proposed “CryptoRuble” can’t be mined, but will instead be centralized and tracked by the Russian government in the manner of fiat currency. There is also no word on whether government-run exchanges will be created for the new coinage. The local reports indicate that CryptoRubles can be exchanged for regular rubles, although provenance will be a key – news reports indicate undocumented acquisitions (as through money laundering) would be subject to a 13 percent tax, according to reports. Appreciation on the coins would also be taxed.

Nokiforov was quoted in local news reports as confirming the existence of the proposed digital coin, or at least the plans for it. “I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after two months our neighbors in the EurAsEC will,” Nikiforov said.

Last week – a day after a Russia Central Bank official said the country would ban exchange trading in cryptocurrency –  Russian president Vladimir Putin made his strongest statements to date against digital currency.

In a meeting quoted by state news service TASS, Putin called for more regulation on cryptocurrency, and said Russia should look to foreign regulators who have cracked down on such trading.

“Virtual [currencies] or cryptocurrencies are becoming and have already become more popular,” said Putin. “They have already become or are turning into a full-fledged payment instrument and an investment asset in certain countries. At the same time, use of cryptocurrencies also carries serious risks.”

He added: “We should develop such a regulatory system on the basis of international experience that will make possible to make relations in this sphere systemic, definitely protect interests of citizens, business and the government, and provide legal guarantees for work with innovative financial instruments,” he said.

Bank of Russia executives were allegedly present at the Putin meeting, according to news reports.