Russia’s Approach to Cryptocurrency: What We Think

Russia is looking to becoming a cashless society with their own cryptocurrency called the ‘CryptoRuble.’ Though the use of these cryptocurrencies is not wholly accepted by other countries, for Russia, it promises to boost the country’s development and advancement.

Russia’s Advancement Over the EEC

Nikolay Nikiforov, Russia's Minister of Communication and Mass Media, said in an interview that if they don’t launch the CryptoRuble, then in 2 months, Russia's neighbors in the Eurasian Economic Community (EEC) will do it.

The CryptoRuble will use the blockchain technology.

Most users of cryptocurrencies use it largely because of one of the big selling points of cryptocurrency: the fact that it’s decentralized. But that's not the case with the CryptoRuble. Just like any regular currency, it will be issued and tracked. To be able to track the coin, it will use Russian designed encryption in a bid. The rate is 13% of the earned difference when buying and selling a CryptoRuble.

Boosting Russia By Preventing Criminal Fund Transfer

The major push behind Vladimir Putin issuing Russia’s own cryptocurrency is that it will be beneficial for the Russian government in collecting income taxes from individuals.

To prevent tax evasion and money laundering, the CryptoRuble will be the only cryptocurrency available and legal to Russian residents.

Since cryptocurrencies are decentralized, Russia has historically been worried about it being used by criminals. Their concern that drug cartels, human trafficking and terrorists may try to use the anonymous currency, has pushed them into allowing cryptocurrency as a mainstream currency, but with specific rules.

Citizens are required to declare where their CryptoRubles originated, or they will be charged a 13% fixed tax when converting the cryptocurrency into Russian rubles.

The Russian president added that even though in the past they may have been worried about criminal activity, recognizing the growth of cryptocurrency and investing in its future has become a necessity.

What This Means for Cryptocurrencies

As Russia moves to bring cryptocurrency into the spotlight, the value of cryptocurrencies and the blockchain increases. As Nikiforov wisely noted, countries who don’t start innovating with cryptocurrency and blockchain technology will quickly be left in the dust.

The blockchain will allow for greater transparency, security and innovation in the financial industry. The race to become a part of this rapidly developing technology has begun, and other countries would be wise to get involved while they still can.

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