Russia is set to launch its own official cryptocurrency, local media has reported.
Russian President Vladimir Putin announced the launch of the “CryptoRuble” during a closed-door meeting in Moscow last week.
Minister of Communications Nikolay Nikiforov explained that the cryptocurrency would not be mined, but issued and controlled by Russian authorities, but would still make use of the infamous Blockchain technology that underpins the likes of Bitcoin and Ethereum. He went on to say that CryptoRubles could be converted in standard fiat currency at any time, but a 13 percent tax would be leveied on any conversion where the user could not explain where he or she obtained the currency.
Justifying Russia’s decision to get into cryptocurrencies, Nikiforov said:
“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbours in the EurAsEC will.”
The announcement from the Kremlin follows months of speculation on whether Russia would offer an official alternative to the current decentralised cryptocurrencies, which it has previously described as “illegitimate” replacements for currency.
Many have questioned whether people will use a cryptocurrency that does not offer the decentralisation and anonymity that made Bitcoin such a success, but by making the currency official and backed by the state could make the currency a valuable digital financial tool, where the Blockchain is used to reduce fraud.
Photograph by Putevodnik