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Cyber currency: Russia to create Cryptorouble to evade sanctions

If you are versed in world politics, you will know Russia has been continually slammed with multiple sanctions from both the EU and the US. These sanctions increased after Russia’s annexation of the former Ukrainian city of Crimea. Now it seems like Russia is having an eye on blockchain technology to evade sanctions by considering a state-owned cyber currency called Cryptorouble.

“This instrument suits us well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard to sanctions” Sergei Glazev, Economic advisor to Putin.

According to the Financial Times, Putin has also ordered work on establishing a cyber currency as the country doesn’t want to miss the benefits of blockchain and its technology. If the plan goes through, the cyber currency will be the same as Rouble. It will be tracked, and its circulation will be restricted. Therefore, it will be as centralized as fiat but it will blockchain based.

Some other countries have regulated cryptocurrencies meanwhile Belarus has made it legal being the first country to do so. Some central banks are also considering creating their own digital currencies. Sweden’s Riksbank is among the list meanwhile the EU Central bank and Japan have backed off similar moves for now.

Putin previously threatened to close cryptocurrency exchanges in Russia saying cryptocurrencies are risky and can be used for criminal activities. During an interview a couple of months ago, Putin said “The usage of cryptocurrencies carries serious risks. I know the central bank’s position on that”. He continued saying a cyber currency is issued by an unlimited number of anonymous bodies. Thus, buyers of cryptocurrencies could be involved in unlawful activities”.

What could have caused Putin to change his stance to consider the cyber currency “Cryptorouble”? Do you think “Cryptorouble” will be a reality or will end in the talking phase?

 

Let us know your thoughts on a cyber currency aimed at evading sanctions.

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