Russia's National Cryptocurrency Would Ban Rivals

Russia’s Deputy Director of the Federal Financial Monitoring Service just revealed that discussions are underway between the Central Bank and the Ministry of Finance regarding a national cryptocurrency.

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Russia’s Own Crypto on its Way?

Deputy Director of the Federal Monitoring Service, Pavel Livadny, says that Russian citizens will be able to purchase the cryptocurrency directly with rubles online or through other electronic devices such as an automated teller. Also with a state issued system, all alternative cryptocurrencies including Bitcoin would be banned within the region.

Elvira Nabiullina, head of Russia’s Central Bank, has shown concern when it comes to permissionless digital currencies and believes they would be used for ill intent. Russian executives believe a centralized and permissioned cryptocurrency that operates under regulatory policy will be useful to the country, however.

Evgeny Korchagin, the chairman of S-Kpartners, told the Kommersant:

At the moment, cryptocurrency payments are not regulated in our country. So, if you pay and are deceived, no court will consider your claim. Approval from the Federal Financial Monitoring Service and the Central Bank, in any case, will have a positive impact on the cryptocurrency use.

The BitRuble

It’s not confirmed whether or not the conversations concerning a national digital currency are still involving QIWI’s “bit-ruble” concept, which is supposed to be introduced this year. CEO of the company Sergey Solonin told Russian business daily Kommersant that the project would take several million dollars. The Russian Ministry of Finance and its central bank were also concerned with laundering and terrorism being tied to cryptocurrency. Now Livadny says that if they proceed with the idea of a national cryptocurrency, its issuers will be under strict regulation and licensure.

QIWI currently operates a large payment terminal chain and believes its service can facilitate the use of a Russian national cryptocurrency. The company and many officials in the region see some positive implications to creating a central cryptocurrency.

However, it’s not the first time a national token has been created as Auroracoin tried to become the Iceland version of Bitcoin. Icelandic state authorities did not issue the digital currency, and eventually it lost nearly all of its initial value. Keep in mind that Auroracoin wasn’t an official Icelandic crypto as it was issued by a private entity and no other cryptocurrencies were deemed illegal.

Whereas the country of Ecuador was the first nation state to create its own sovereign cryptocurrency and all alternatives were officially banned in the region. As well as banning other digital currency competitors, a state issued cryptocurrency could allow central banks a new, cost-effective standard of money that’s not officially tethered to the U.S. dollar.

A cryptocurrency issued by a Russian state central entity — while banning cryptos like Bitcoin — could give officials and executives more reason to support the idea of a national BitRuble.

What do you think of a National Russian cryptocurrency? Let us know in the comments below.

Images via Getty, Qiwi, Pixabay