Crypto ruble

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.