Russia is a very important player in world matters. It holds that permanent seat in the UNSC (United Nations Security Council). That gives it the power to veto the actions of the Western world. It has done so in the past, as can be noted in the case of Syria. It has almost 7% of the world’s proven oil reserves and just over 17% of the world’s gas reserves, is the world’s largest natural gas exporter, and the second largest oil producer. It is also the world’s third largest military spender and second largest arms exporter.
A Currency for Urgency?
Despite all this, there are reports that Russia will soon have its own cryptocurrency, the Cryptoruble. There has been a lot of controversy surrounding the Cryptoruble but this makes it official. It will be issued by the state and will follow the block-chain system. AIF of Russia says that there was a meeting between President Putin and his economic advisors at the Capital Club in Moscow.
The president unveiled his decision there, that Russia should have its own cryptocurrency, calling it the Cryptoruble. Why should Russia lag behind when the world’s banks and governments are issuing their own cryptocurrencies.
Nikolai Nikiforov, the Russian Minister for Communication and mass communication revealed the discussion that happened at the meeting, as he bought up the subject of the cryptocurrency. Nikiforov said that the development and issuance of the Cryptoruble will happen fast and efficiently. The exact technology to be used in the development of the Cryptoruble is not exactly known but Nikiforov added that it cannot be mined.
It can be seen that the decision is urgent and one backed by competition, as one statement by Nikiforov shows. He declared that the sole purpose of launching the Cryptoruble was competition. He said that if they don’t, their “neighbors in the Eurasian Economic community will do it in 2 months.” They want to get and stay ahead of the curve; the curve being the neighboring European countries.
The Cryptoruble will be able to be used as a legal tender. People in Russia who adopt the cryptocurrency will be able to pay taxes through the cryptocurrency.The tax will be follow similar rates defined in Russia’s existing tax framework. For example, the Russian tax system entails that everyone pays 13% tax on their income. Similarly, the tax rate is the same (13%) in the case of the cryptocurrency.
For those who were bracing themselves for the move towards legalization of bitcoin and other cryptocurrencies in Russia, this news is a bit of a downer. There’s no such luck, so hang in there. The Cryptoruble is going to use Russian cryptography, not the methods used to make bitcoins and others. It’s Russia’s step in moving towards digitization of their currency. Putin is still skeptical of cryptocurrency such as bitcoins, saying that they have many “serious risks associated with it.” Earlier in October, Russia’s central bank also announced its intentions to block websites offering services for exchanging and trading bitcoins.
Only time will tell the true power of this cryptocurrency and what it will be used for.