Since the creation of Bitcoin, many other cryptographic currencies have emerged. Interest in these new virtual currencies keeps growing and the market cap is currently at more than 725 billion. Which is exactly why Russian President Vladimir Putin is now taking steps in the cryptographic direction.
The World of Cryptocurrency
Satoshi Nakamoto is the founder of Bitcoin is credited with the creation of virtual currency. The name, however, is only a pseudonym and his identity is not known to this day. But still, his creation has revolutionized the world of finance.
As an alternative to traditional currency, cryptocurrencies are not subject to any specific legal tender and its growing popularity is a threat to conventional money. And, now the public is starting to take an interest, just as are most national governments.
The advantages of this type of currency are numerous. Cryptocurrency is an alternative to our traditional payment system and aims to make e-commerce more accessible to all. With cryptocurrencies, transfers are made faster without the need for intermediaries. This results in little to no transaction fees.
Already in the eyes of countries such as the United Arab Emirates, Estonia and Venezuela, now, Russian is also considering creating its own cryptographic currency.
Vladimir Putin has strongly criticized cryptocurrency in the past due to its lack of regulation. Indeed, in the recent past, there have been allegations of money laundering and that the practice could encourage tax evasion. However, according to the Russian Finance Minister, cryptocurrencies are an “undeniable reality” and that “instead of banishing them, regulating them would be better.”
Russian experts are now working on the implementation of the Crypto-Ruble. With a view to launching the new Russian cryptocurrency, the Russian President has already given guidelines on the development of a legal framework for its regulation and implementation.
Like other virtual currencies, the Crypto-Ruble will be controlled based on loans from the Russian state. However, unlike Bitcoin, the Crypto-Ruble will not be able to be mined. The control of the currency will be done solely by Russian authorities.
The new cryptocurrencies will be based entirely on Russian currency. Exchanges of the Crypto-Ruble will be free if they are justified. Otherwise, a 13% tax will have to be paid to the State.
Why a Russian Cryptocurrency?
On the international playing fields, Russia has been hit hard by sanctions from Western countries which has had a serious impact on its economy. Just like how Venezuela created the Petro to circumvent the embargo imposed by the Trump administration, the Crypto-Ruble will help the Russian stand withstand any potential economic sanctions in the future.
Now, the clock is ticking and the virtual turnaround is only a matter of time. Putin’s ambition is not only to create a new national cryptocurrency, but he also aims at creating an international cryptocurrency. In this respect, the Russian Central Bank has proposed to adopt a digital currency common to countries of the Eurasian Economic Union and the BRICS.
The official release of the new cryptocurrency has yet to be determined.