In BriefAfter banning Bitcoin and other decentralized cryptocurrencies, the Russian government announced that it's making its own version of a crypto coin. Called the CryptoRuble, this Russian digital cash would solely be issued and controlled by the state.
At a closed-door meeting in Moscow, Vladimir Putin officially called for a state-run blockchain-based digital currency which will be called “CryptoRuble,” according to local Russian publication AIF, first mentioned by CoinTelegraph. The CryptoRuble might put an end to some of crypto’s most challenging weeks in Russia, where the government blocked cryptocurrency exchanges despite a repeated show of interest for digital cash.
“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,” Russian communications minister Nikolay Nikiforov said, as reported by AIF.
Yet despite the announcement, there seems to be no indication that the government will withdraw its cryptocurrency ban. On the contrary, Nikiforov said that the creation of CryptoRuble will not translate to a legalization of Bitcoin and other cryptocurrencies. It does, however, confirm Russia’s previously expressed interest in blockchain technologies, like Bitcoin’s rival Ethereum.
What About Decentralization?
The CryptoRuble won’t be a typical crypto coin, as it won’t be open for miners. Instead, the government would be the only one able to issue, control, and maintain the currency. CryptoRubles could be exchanged for Rubles anytime, with a 13 percent tax levied on owners unable to declare the source of their crypto coins. A similar 13 percent tax would be incurred by transactions involving the buying and selling of CryptoRubles.
“It will, most likely, be a closed model with a certain volume of regulated emissions,” Nikiforov explained. The minister added that further details are still in development, adding that a Russian cryptocurrency should use Russian cryptography.
While this guarantees the same type of security that blockchain-based coins provide, there’s one apparently major difference. It seems that the CryptoRuble doesn’t run on the same decentralized model that makes blockchain and crypto coins unique and popular. Still, it’s a first step to Russian cryptocurrency adoption, which experts predict will be the key for a blockchain revolution.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.