Cryptocurrencies are incredibly resilient, world changing technologies.
The Ministry of Finance recently presented a Digital Assets Regulation Bill
meant to legalize and regulate cryptocurrency. Russia is expected to begin
discussing a legal regulation authorizing the use of virtual currencies. A
document is expected to be passed by the end of March 2018 to discuss controls
on the use of virtual currencies and Russian officials support the use of digital
currency in Russia in general .
Russia has recently announced its plans for a national digital currency
called Crypto-Ruble. Cryptocurrency as a way to improve standard of living in
Russia. The crypto-ruble will serve as a connection between the real world and
the crypto-world, which would enable the efficient tracking of capital flow in
the Russian economy. Those who won’t be able to provide a paper trail of
ownership will have to pay tax on crypto-ruble at the capital gain rates. It will
encourage the development of low-cost crypto-payment systems, which allows
the exchange of rubles for goods only in digital currencies where ownership can
be tracked.
The decentralized nature of cryptocurrency make them hard to completely
stamp out but central. А vision for a smart Crypto-Ruble implies the following
criteria:
а national currency, which offers stability. It means volatility against
one or a group of fiat currencies.
а currency that not only is stable but also acts as a store of value. That
means this currency has to protect the purchasing power of its holder in
the Global Economy. That also mean its performance has to be simple
and rational by construction and not depend upon the effectiveness of
any system.
It has to be truly global and be exchangeable with all major national fiat
and cryptocurrencies.
it has to be liquid i.e. it has to provide a tradable price at any moment
for small or large amounts, from the equivalent of 10 rubles right up to
50 million rubles. Liquidity has to be achieved by having an elastic
supply.
It has to be robust to market stress. The crypto market is volatile and
there is a renewed interest for fiat-backed cryptocurrencies.
Therefore, the aim of Russian official crypto-policy is to eliminate the
chances of illegal transactions such as, human-trafficking, terrorism financing,
and money laundering, while at the same time using this technology to
modernize the internal capital management of Russia. This is the main strategy
behind crypto-ruble. The creators of the bill argue that legalizing
cryptocurrency would reduce financial fraud and provide better fiscal
transparency. But approving the bill doesn’t mean cryptocurrency will become
a legal payment instrument in Russia, as trading would only be allowed through
compliant exchanges.
At this stage, the growth and future direction of ICOs (Initial Coin
Offerings) and crypto-technology seems heavily dependent on international
regulation. The G20 Finance and Central Banks Deputies met in March 2018.
No specific proposals devoted to cryptocurencies were on the table and on the
one hand leaders had focused on precautionary investors of the potential risks
and from another hand didn`t condemn the blockchain technology in whole.
2020 becomes the new age of international monetary experimentation
features the de-dollarisation of assets, trade workarounds using local currencies
and swaps, and new bank-to-bank payment mechanisms and digital currencies
in Russia[3]. At the same time, the State Duma was developing a bill "On
digital financial assets", which was finalized and adopted only in mid-2020. On
October 13, 2020, the Bank of Russia for the first time published a report for
public consultations (admission: in fact, an alternative name White Paper) on
the Digital Rouble. The Law "On Digital Financial Assets, Digital Currency
and on Amendments to Certain Legislative Acts of the Russian Federation";
entered into force on January 1, 2021 by decree of the President of Russia. So
far, the Central Bank has not decided to issue a digital ruble, but is only
considering "possible options and ways to implement such a decision." First,
the Bank of Russia needs to determine the necessary functional requirements
for launching the project.
Recently it became known that in January 2022, the State Duma plans to
begin drafting amendments to the legislation that are necessary for the
introduction of CBDC.
