Russian president Vladimir Putin is launching his own version of Bitcoin to ensure his government receives tax from the profits of people using cyber currencies.

The CryptoRuble will be launched in the coming weeks and will be the only cryptocurrency legal to use for Russian citizens.

The decision to launch the new currency - which will use Russian designed encryption - is designed to prevent people avoiding tax. Profits on CryptoRuble transactions will be taxed at 13 per cent. Anyone who cannot explain the origins of their cyber wealth will have to pay 13 per cent on the entire amount.

Vladimir Putin has authorised the creation of a Russian online currency called the CryptoRuble

The Russian government wants its own cyber currency in an effort to stop tax evasion

Putin authorised the new online currency after a meeting with his Communications Minister Nikolay Nikiforov.

Nikiforov told Russia Today: 'I am so confident to declare that we will run CryptoRuble just for one simple reason: if we don’t, our neighbors in the Eurasian Economic Community will do it in a couple of months.'

He said the new Russian currency will enable the government to tackle the problem of tax evasion.

He continued: 'When buying and selling a CryptoRuble, the rate will be 13 per cent from the earned difference. If the owner cannot explain the reason for the appearance of his CryptoRubles, when converting them into Russian rubles, the tax for him will be 13 percent of the total.'

His colleague Oleg Fomichev said international investors will be allowed to use CryptoRubles once they are launched.

He added: 'This mustn’t be a private currency, but the one, which is issued by the state, controlled by the state and enable to provide circulation of digital money in light of the digital economy.'