At a private meeting in Moscow, Vladimir Putin has advocated for Russia to begin issuing its own cryptocurrency. Dubbed CryptoRuble, the Russian cryptocurrency will not be open for mining and will be under tight control by government authorities.
Regular paper Rubles will be exchangeable for CryptoRubles at any time. However, a 13 percent tax may be imposed if coinholders are unable to satisfy Russian officials on the origins of their cryptocurrency. If there is a rise in value, the same 13 percent rate will be applied upon sale of the coin only on the difference in value.
Russia is not considered a friendly state for digital currencies considering Putin previously called for an unconditional ban of cryptocurrencies. Now, it seems that the Kremlin wants to keep pace with advances in technology but does not want any other currencies circulating within the country. According to one Russian official, it is inevitable that Russia could fall behind its neighboring countries if it does not launch its own digital currency.
"I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will." - Nikolay Nikiforov, Minister of Communications
Unlike other cryptocurrencies, CryptoRuble will not be decentralized. The Russian government will have the ability to modify its own blockchain at any given time. The potential for abuse of a government-operated blockchain is extremely high although for this reason, it is unlikely that many merchants outside of Russia would consider accepting the coin.
As cryptocurrencies continue to climb in value and are continuously achieving new all-time highs, there is no telling where they may end up. Should other countries consider launching their own blockchain-backed currencies?