Russia has been in the news several times because it wants to regulate Bitcoin and cryptocurrencies. It has announced its plan to create the CryptoRuble (national cryptocurrency), and has already opened two cryptocurrency institutions in Vladivostok. According to Bloomberg, an adviser to President Vladimir Putin said that cryptocurrencies may be used to help banks avoid international sanctions.
In the End Cryptocurrencies May Help Russia
During the last years, Russia has been suffering from hard sanctions imposed by the European Union and the United States. Russia’s behaviour in the international stage was not as it should be for the western hemisphere. Economic sanctions have been established to Russian banks and some investors.
This is the reason why Putin’s advisor told him that cryptocurrencies are ‘an objective need’ because of the sanctions that Russia is suffering from them.
“There is an objective need for this instrument (cryptocurrencies), connected, first, with the fact that the banks are subject to sanctions, as it is known, and do not want to conduct settlements. Cryptocurrencies may be suitable for sensitive activities for the state,” told Sergey Glazyev Putin’s advisor.
Russian CryptoRuble and Bitcoin Regulations
The CryptoRuble has been announced by Nikolay Nikiforov, Russian minister of Communication and Mass Media, on October. According to the Ministry, it will be available for the public in general once the technology will be installed. This virtual currency will be considered as legal tender in Russia and its supply will be closely controlled.
“If the owner of CryptoRubles cannot explain the reason of the appearance of the CryptoRubles, when converting them into Russian Rubles, there will be a 13 percent tax,” told Nikiforov.
About cryptocurrency regulations, Russia was analysing the possibility od regulating the virtual currency market and ICOs. According to the Finance Minister Anton Siluanov, “the state should regulate the process of issuing cryptocurrencies, the process of mining as well as the process of circulation. The state should head this situation and regulate it legally.”
The CryptoRuble will compete with the cryptocurrencies we know today, but it will not offer one of the most important characteristics of other virtual currencies. It will not be decentralized. Russia will control it. The problem of inflation will still be there present and the government will be near to the users. It is not a decentralised currency as Bitcoin. It will depend on the Russian Central Bank and its arbitrariness.
This year the cryptocurrency market has seen an incredible surge. Now the total market capitalization is half trillion dollars, when at the beginning of the year it was just $17 billion dollars. In 2018 it is expected to keep growing as well as Initial Coin Offerings.
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