What do you get when you implement cryptocurrency in Russia? Cryptoruble! Read on to find out how Russian cryptocurrency is doing.
CryptoRuble | Cryptocurrency in Russia
Russia’s Pivot Toward a Pro Cryptocurrency Policy
Prior to the great boom which propelled Bitcoin over $7,000, both Russian bankers and politicians alike voiced their conflicting opinions and hesitancy toward the cryptocurrency.
Vladimir Putin called for tighter regulation of cryptocurrencies only a month prior to his speech where he touched on nurturing the new technology, while authoritative bankers compared cryptocurrencies to Ponzi schemes.
At one time, a proposal was made that would punish those owning bitcoin with up to seven years in jail for a violation.
Recently however, these antagonistic statements from central banks and the Kremlin have pivoted with a series of official announcements that would strengthen Russia’s position as a possible focal point for the impending and inescapable cryptocurrency revolution. The major impetus for this considerable change in rhetoric is demanded from people all over the world for digital cash as instruments of investment, payment, and more. The people’s demand hasn’t fallen on deaf ears in Russia.
But the Russian elite have answered the people’s call in a uniquely Russian way.
To everyone’s surprise, President Putin, in late October of 2017, announced his support for cryptocurrency in Russia and subsequently ordered legislation that would put into place infrastructure for its national adoption.
Unique legal frameworks has since been conceived for the taxation of cryptocurrency mining, regulating initial coin offerings (ICOs), developing blockchain technology in business, and establishing a far-reaching system of payment for Russian citizens.
Perhaps, the most astonishing statement given by President Putin’s was his announcement that Russia intends to form a digital crypto rendition of the ruble termed the ‘CryptoRuble’. The CryptoRuble is supposed to be interchangeable with the ruble on a 1:1 ratio. Quite dissimilar to other more ‘traditional’ forms of cryptocurrencies, the CryptoRuble will not be able to be mined and will be exclusively issued by the Russia’s central bank. This kind of approach is distinctly Russian, and is based on years of meticulous observation of how various forms of cryptocurrency has previously affected other countries.
This Russian model cedes some economic freedoms for government control, while still preserving and incorporating the technology’s primary advantages.
Additionally, an unchangeable ledger will make citizen cash flows transparent to the government and help stem fraud and corruption. In theory, it should also help to bring down walls of previous systems plagued by middlemen.
CryptoRuble income is expected to be taxed at a rate of 13 percent for those wo’re unable to provide a legitimate source for it. Not only is this an attempt at preventing corruption, but it’s also a way the Russian government can profit from it.
Russian leadership is likely to remain watchful of any new methods they can use to achieve a competitive edge in international politics, finance and trade.
Cryptocurrency seems to be one of the most likely channels for increased influence across borders; thus, Russia’s pivot toward a pro-crypto policy stance is quite logical.