2016-05-31 Tue

The Federal Financial Monitoring Service has announced that Russia has plans to create a national cryptocurrency along with the ruble. Officials state that this introduction will make transactions convenient and cheaper as well. Unlike Bitcoins though, Russian cryptocurrency will have a central issuer in control. The amount of money that has been used to make transactions using bitcoins has tripled this year. Exchanges would be licensed using some kind of national identification to minimize anonymous transfers in case of national cryptocurrencies.

Russia will be the first to issue a cryptocurrency instead of an electronic version of their existing, national legal tender. Unlike E-currencies, cryptocurrencies creates currency units that are cryptographically secured and unique. Ecuador was the first country to create a national e-currency to improve stability and avoid debasement.

The Russian President Putin said at a press conference that this money (bitcoins) are backed by nothing which is a major concern. He also said that cryptocurrency as money may be problematic, but holds promise and there are some fundamental issues that need to be looked at.

A bill was made in January where cryptocurrencies are considered as “money surrogates,” which are already illegal. It is not known if this is the bill that will be used to make all other cryptocurrencies illegal if the new national cryptocurrency be issued.