Russia has had a somewhat troubled relationship with cryptocurrencies and its usage. Especially this year. The Russian government has changed its stance on the crypto money several times. So far this year, the Kremlin went from dismissing crypto coins as illegitimate replacements for official currencies, to recognizing its improvements and influence. Additionally, Kremlin has also engaged in studying the ways to incorporate the blockchain into government services as a countermeasure for the corruption problem the country is experiencing.
However, a few days ago came a piece of news that shocked everyone. Russia’s president, Vladimir Putin, announced that in a closed-door meeting his government decided the country would start issuing a cryptocurrency named the CryptoRubble. Several Russian news outlets reported the news.
For example, Nikolay Nikiforov, Russia’s Minister of Communications made an admittedly funny declaration follow the official statement. “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.”
Nikiforov is the youngest minister in the history of the Russian Federation, and it seems that his youth is responsible for this technological advance. Additionally, Nikiforov has also been involved with innovative developments in the communications network and helped to develop a program to modernized the government bureaucracy. The young minister has always been a supporter for the improvement of the domestic software industry, and this is one of the many steps needed to get Russia moving in the right direction.
The Russian coin
However, the cryptocurrency won’t follow the same principles as Bitcoin. Russia is known for the Kremlin influencing everything that happens around the country. So it is safe to say the CryptoRubble won’t operate under the same principles as Bitcoin or Ethereum.
Most coins are generated through the process of “mining.” Crypto mining is a way to reward computers that lend their computer power the sustain and maintenance of the blockchain. And it is the blockchain the one in charge of recording the transactions and making sure all operations happen seamlessly. But, the miners are also the reason why Bitcoin and Altcoins are decentralised.
The CryptoRubble won’t have those characteristics. Nikiforov stated to RT that the currency will be issued by the state and cannot be mined by any means. That means that the there will be a single maker of coins, and that issuer will be the central government.
Additionally, CryptoRubbles can be exchanged for regular Rubbles at any time. But, there is a catch. If the holder is unable to explain the origins of the CryptoRubbles, then a 13% tax level will be charged for the transaction. This tax will be levied on any profits made through selling the coins to other people. So the system won’t be decentralised or free.
Even though the CryptoRubble has several differences with the driving principles of cryptocurrencies, it is still an improvement. And, if we take a more prominent view of things, Russia’s idea aligns with the propositions made in Japan and Dubai. So the cryptocurrency future is about to become a reality.