On 7. November, the Chairman of the Russian state Duma Committee for financial markets details about “CryptoRuble announced,” a long-discussed crypto-currency project of the government.
in Particular, the official said that a state-supported stable Coin of the Russian Fiat is ruble fully equivalent, however, in a digital space. The Russian authorities have now found, after long years of contradictory statements, a concept, and yet could not make a rouble Stable Coin at the end as a stable.
A long and complex history of the national crypto-currency in Russia
The Russian crypto-currency was originally referred to as the “Bitruble”. In the media the term “CryptoRuble was” however, more and more often.
The story of CryptoRuble could be followed up in the autumn of 2015 as an Online payment processing system based in Moscow, WebMoney, and of the Cyprus-based payment services provider Qiwi raised by the Central Bank of Russia (CBR) separately, and offered, a state-controlled digital currency in the country.
Both proposals were rejected by the government vigorously. In particular, the Russian Ombudsman, Pavel Medvedev, called Qiwis proposal “technical Hooligantum” that is “illegal” and “absolutely inappropriate”.
“In the Constitution to spend money is, who in Russia has the right; It is the [Russian] Central Bank. The only currency in Russia is the ruble. The Rest of the money is illegal, and this type of shame would be a criminal Offence.”
The views of the Russian government to “CryptoRuble” were, however, significantly inconsistent. The Russian newspaper Kommersant in may 2016, local officials discussed the concept of a national crypto-currency, “is to minimize the number of anonymous transactions” – quoted the Deputy Director of the Russian financial financing service Pavel Livadniy.
On 2. June 2017, the CBR announced that it is developing a national crypto-currency. “We will definitely reach a national digital crypto-currency. We have already started to work on it, “ said the Deputy Chairman of the CBR, Olga Skorobogatova, the Ria Novosti news Agency.
a Few days later, on the 5. June, from the elaborate to the head of the CBR, Elvira Nabiullina, the statement of Skorobogatova and added that a national crypto currency is the top priority of the Agency. Nabiullina called it “a medium-term or perhaps long-term Plan”.
President Vladimir Putin claimed in October 2017, crypto be currencies “a serious threat” and would be used for crimes and the CBR will block websites, the Bitcoin and Altcoins to sell. Russia’s Finance Minister Anton Siluanov already made a month earlier, claimed that the authorities would have to accept the idea of the market for digital currencies:
“There is no point to ban them, it is necessary to regulate them.”
Also reported in October 2017, local news Agency the arguments and facts i Fakti (AiF), that Putin had “a direct command given” for the “development of the CryptoRuble”. The source is called the Minister of communications, Nikolay Nikiforov, as a source. Nikiforov mentioned according to Reports, for the first Time peculiarities of the national crypto-currency. According to the official, the “CryptoRuble could not be” mined; and it may at any time be made against regular rubles exchanged (if the owner cannot, however, explain where the CryptoRubles come, will be levied a tax in the amount of 13 percent). The same tax would be applied on every profit made from the trading of the Tokens. Nikiforov said:
“I declare confident that we run CryptoRuble for a simple reason: If we don’t do it, do it, our neighbors in the Eurasec (Eurasian economic community) after two months.”
This report has not been confirmed by the Mainstream media, and it is still unclear whether Putin has agreed to the above-mentioned concept. Already in the next month, in November 2017, argued Nikiforov, the term “CryptoRuble” was “quite wrong”, and proposed to designate it as a “digital Token”.
In December 2017, the state news Agency TASS reported on a recently held field day Meeting, which dealt with the legislation for digital currencies in the country. The article argued that both the Finance Ministry and the Central Bank of Russia were skeptical of the publication of a national crypto-currency.
On 1. January 2018, the Financial Times reported a meeting of another Government, in which Sergei Glazyev, economic Advisor of President Putin, allegedly argued that the CryptoRuble could help to alleviate the pressure of Western sanctions. Later, the concept of countries such as Iran and Venezuela, will be taken up, also try to use their national crypto-currency to avoid such penalties.
however, There was still no uniform official attitude of the Russian government with regard to the issue of a national digital currency. And the indecision went on.
a Few weeks later, in the same month, announced the Russian Association for crypto-currency and Blockchain (RACIB) that CryptoRuble will come in mid-2019 on the market. According to Riyib, Director of RACIB, Details of the project will be officially presented in July 2018, while the Coin itself should be issued a year later.
In June 2018, Putin claimed that Russia could have currency no own Crypto, since crypto-currency “by Definition” can include any of the centralized state, because it “goes beyond borders”.
“Cryptoruble” is a Stablecoin
After a long Back-and-Forth on the subject within the Russian government, was the concept of the CryptoRuble finally, a more concrete
On 2. November 2018, Anatoly Aksakov, Chairman of the Russian state Duma Committee for financial markets, said that his Agency is considering the introduction of a government-backed crypto-currency that is pegged to the Russian ruble.
The officials expressed confidence that the government will support such a crypto-currency, and made it clear that it is a “ruble-linked crypto-currency”. The Deputy added.rdem add to that the implied coin would be through the Blockchain-powered Stablecoin, which will be coupled 1:1 to the ruble.
Aksakov described the model of the creation of the Stablecoin and noted that the crypto-currency on Deposit by a Bank in a certain height is secured. Accordingly, a banking institution will issue the appropriate amount of crypto-Assets by Blockchain used and the ratio of 1:1 to comply with.
The Chairman also made it clear that the crypto-currency from the Central Bank will be published, as it is backed by Fiat currency. Finally, Aksakov noted that the implementation of the Blockchain technology in terms of the output of “crypto-money” is “promising”.
Interestingly, Aksakov, the same official who has deleted the mention of Bitcoin and Ethereum from a draft law to regulate the digital currency, before its reading in the state Duma in October 2018. He explained the step with the words: “We have decided that we need this dubious Bitcoins.”
On 7. November gave Aksakov more detailed information about the national issued Stablecoin. In particular, he said that the “crypto rubles” that could appear after the adoption of laws to regulate the crypto-currency industry in Russia (the also changed constantly, and delayed), “the same rubles, would be available only in encrypted Form”. The Chairman of the state Duma stated that it would be possible to swap the Russian Stablecoin for the appropriate money in Fiat money:
“For example, you a Bank a hundred thousand rubles, and get a hundred thousand crypto-ruble one-to-one for Fiat money. You can use this money to buy in the Blockchain fixed.”
Aksakov stressed that the crypto-rubles -“the ruble is in the Blockchain” – the Fiat would replace the ruble, “as soon as the Blockchain has a significant place in our economy.” He did not specify, however, what type of Blockchain that will be. Earlier, the Minister of communications Nikiforov argued that “CryptoRuble” should be based on a locally developed technology.
How stable will it be?
The output of a Stablecoin that is pegged to the Russian ruble, may appear to be, from an economic point of view, somewhat questionable, since the currency has shown in the last few years, the constant growth, or even stability. On the contrary, since the political tension has risen between Russia and the West in 2014, it is steadily decreased.
specifically, the ruble price declined on 16. December 2014. The US Dollar Index specified by the “Russia Trading System” (RTS) fell by 12%, the highest level since the global financial crisis in 2008. 15. December, the Russian Gold and foreign currency reserves for the first Time since August 2009 have been reduced by 13.74 billion euros to 350 billion euros, as the government began to tackle the “worst financial crisis since 1998,” according to Reuters.
This happened mainly for two reasons: first, the price of Oil – the commodity upon which the Russian economy is largely built to fall sharply, which has forced the CBR to increase the interest rates by a whopping 650 basis points, raising began. Secondly, strict Western sanctions against Russian companies, which have been pronounced as a response to the annexation of the Crimea by Russia in the beginning of 2014 have played their role in the dramatic fall of the ruble.
The ruble Crash has had a significant impact on the Russian economy as a result of the Case was demanded by the local people financially. The annual rate of inflation rose to over 10 percent. The prices of Goods, including beef and fish, have increased within a few months before the end of the year to 40 to 50 percent, which was due to the Russian import ban on Western products – the government’s response to the American and European sanctions. Passenger Car sales decreased compared to the previous year by 12 percent.
The Situation has stabilised in the next few years, to some extent, but the interest rates in US dollars remained high. The local ban on Western imports remained also, what is the consumer behavior of Russians will be reduced significantly.
In August of this year the Situation was repeated again, although to a lesser extent. Russia’s ruble fell to 69,40 against the Dollar, the lowest level in two years. The CBR made the new US sanctions for the decline of the ruble responsible introduced in the Congress because of a chemical weapons attack in Salisbury, and because of Reports about the interference of Russia in the U.S. presidential election in 2016.
If a ruble-linked crypto-currency of the Russian authorities after a year will receive long exchange of contradictory comments, the green light, could be sentenced to the price of the “crypto rubles”, unexpected, politically driven price spikes.
