Category Archives: CryptoRuble

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Vladimir Putin Shoots Down CryptoRuble

Vladimir Putin has unequivocally shot down the possibility of any official Russian cryptocurrency. The Russian president discussed his views on cryptocurrency during his 16th annual Direct Line speech where the Russian public is allowed to ask him questions.

Putin said an official Russian cryptocurrency was not possible since cryptocurrency inherently cannot be controlled by any centralized organization. There had been speculation earlier in 2018 that Russia was going to launch its own cryptocurrency, possibly to be named the CryptoRuble, since it would be the cryptocurrency version of the Russian ruble (RUB).

The Russian government has been giving mixed messages to the public about its own national cryptocurrency since 2015. Putin’s economic advisor, Sergei Glazyev, has said the CryptoRuble would help Russia circumvent Western sanctions. The head of the Russian Association of Cryptocurrency and Blockchain, Arseniy Sheltsin, said the CryptoRuble would be launched sometime in 2019. With the Russian president now saying there won’t be a CryptoRuble, this would seem to override previous statements from those with less authority.

Putin further added during his Direct Line speech that people should treat cryptocurrency cautiously since it was not backed by anything, and that the Central Bank of the Russian Federation did not consider cryptocurrency a means of payment or a store of value.

Bitcoin proponents would argue the statement to be inaccurate, since Bitcoin has intrinsic value due to it being a decentralized and secure form of money that no government or organization controls. Also, Bitcoin has proven itself as an efficient, fast, and secure means of payment.

Putin, however, did say something somewhat positive regarding cryptocurrency in the speech, believing that Russia should keep an eye on cryptocurrency to see how the country could utilize it to its benefit. Specifically, he said Russia could use cryptocurrency to avoid restrictions in the field of international finance.

This could be construed as a hint of cryptocurrency considerations to circumvent Western sanctions, using existing ones such as Bitcoin. It would at least prevent a scenario of national cryptocurrency sanctions, such as what Venezuela experienced when the US completely banned the South American country’s official cryptocurrency, the Petromoneda.

 

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Global State Bank Crypto Adoption Still in Its Infancy

With banks increasingly switching on to the current global interest in cryptocurrencies, digital currencies are now being utilized by the same institutions they were designed to subvert, writes Cointelegraph.

More and more banks around the world see blockchain as a panacea to banking issues, all long overdue for improvement and update. They are realizing that, due to today’s already digitalized banking, which has changed the nature of payment and storage of monies, the technology behind Bitcoin clearly has a place within global financial systems.

Only a fraction of money is paper money bills in circulation, and current digital systems lack speed, stability and security. This, coupled with customer demand, as in the case of Goldman Sachs’s adoption of a digital dollar recently, is driving many nations to consider or actively support central bank cryptocurrency.

Governments and central banks from India, Japan, Canada, Russia, Switzerland to Singapore and the Marshall Islands are all currently looking into a government-backed digital currency. Several other governments, including China, Estonia, and Iran, have discussed plans for their own digital currency. Of these, the Marshall Islands have taken one step further and plan to issue its own cryptocurrency that will be circulated as legal tender along with the US dollar.

Singapore has project UBIN and the Bank of Canada has Project Jasper, while the United States is toying with the idea of a FedCoin. Last year, in the Middle East, the Bank of Israel was considering a digital Shekel.

In Sweden, many retail stores no longer accept paper money and some Swedish bank branches no longer disburse or collect cash. In response, the Riksbank has a current project in progress examining the viability of an e-Krona for retail payments.

Crypto-friendly Switzerland is looking towards the viability of a Swiss National Bank (SNB) e-Franc, but has little support within the Swiss government. The often controversial Venezuelan Petro, seen as both an economy saver and possible sanction breaker, was launched in February 2018 to supplement the plummeting bolivar fuerte, reportedly backed by the nation’s oil reserves.

In Russia, deputy minister of economic development Oleg Fomichev suggested the proposed CryptoRuble, conceived in a climate of heavy anti-crypto sentiments regarding adoption by private companies but nonetheless in state hands, becoming another powerful sanction breaker in the current political climate. Russian president Vladimir Putin stated that the Stone Age has not ended because humanity has run out of stones, but because new technologies have appeared.

“If if central banks were to back cryptocurrencies, the central banks would be better positioned to predict money demand and therefore adjust supply accordingly,” writes Mohamed Damak of S and P Global, adding, “It is still too early to tell in which direction this instruments will move.”

Alternatively, he writes, “If cryptocurrencies were to take off and become an effective currency issued in a decentralized manner, the impact on monetary policy implementation would be deep, since central banks might lose their ability to control the money supply.”

It is a view more closely aligned to Satoshi Nakamoto’s original vision.

 

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