Vladimir Putin has called for a Russian national cryptocurrency to be issued, according to reports from the office of his communications minister, Nikolay Nikiforov. The mining of all other cryptocurrencies will be banned once the state-sanctioned CryptoRuble has been issued. Explaining the decision to implement the world’s first nationalised cryptocurrency, Nikiforov stated:
“If we don’t, our neighbours [in the EEC] will do it in a couple of months”.
All financial operations which use the CryptoRuble will be taxed, and these taxes will also apply to any appreciation in value of the currency. Owners who are unable to explain the source of CryptoRubles in their coin wallets will be expected to pay a tax of 13% when converting them into hard currency, although it remains to be seen whether those with proof that the coins were legitimately mined will be hit with the same levy.
Catching up with the digital economy
The new national digital currency is expected to be moved to the international markets, according to statements from Oleg Fomichev, Russia’s Deputy Minister of Economic Development, who stressed that there was little point in simply circulating the currency within the confines of the country:
“This must not be a private currency, but one which is issued and controlled by the state in order to provide the circulation of digital money, in light of the emerging digital economy.”
Defeating the object
However, critics of the CryptoRuble have been quick to point out on social media and internet forums that many people choose to use currencies like Bitcoin and Ethereum in order to avoid the control and attention of government agencies. Others see the nationalisation of digital currency as a cynical attempt to regulate the “black market economics” of crypto, and a step backwards for the movement in general.