Just days after The American Genius reported that the Russian Central Bank would attempt to block access to cryptocurrency trading cites, the Coin Telegraph has reported that the Russian government will issue its very own cryptocurrency, the CryptoRuble.
The report cited local Russian papers, who quoted the minister of communications, Nikolay Nikiforov.
Earlier this week, head of the Central Bank, Sergei Shvetsov, said that he would work with the Prosecutor General’s Office to ban Russian citizens from accessing cryptocurrencies like Bitcoin, calling such currencies a “negative phenomena for our markets” and a “pyramid scheme.”
Now it appears that the Kremlin will create its own cryptocurrency – one it can keep an eye on — which, some might argue, defeats the entire purpose of cryptocurrency.
However, like other cryptocurrencies the CryptoRuble will be based on blockchain and will presumably help prevent online fraud.
CryptoRubles will be exchangeable with regular Rubles, although the systems of exchange have not yet been set up. Experts think that Russia is hoping to stimulate e-commerce without the need for foreign money markets, which will allow them to have more independence from the United States.
According to Nikiforov, the Russian government is setting up its own cryptocurrency under the assumption that if they don’t, other European governments will.
Said NIkiforov, “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.”
Traders using CryptoRubles will be asked to provide documentation of retail transactions and services rendered – or pay a 13 percent tax for undocumented transactions, leaving a wide loophole for money laundering.
Critics say that Russia is trying to facilitate, while also profiting from money laundering; that the Kremlin is stealing the market from other cryptocurrencies; and that the CryptoRuble fundamentally defies the spirit of decentralization that inspired other cryptocurrencies.