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Putin Orders Work on ‘CryptoRuble’ to Escape Western Sanctions

Last Updated May 5, 2023 8:54 AM
Samburaj Das
Last Updated May 5, 2023 8:54 AM

Three-term Russian president Vladimir Putin has ordered Moscow officials to work on creating Russia’s own national cryptocurrency dubbed the ‘cryptoruble’ as a means to evade sanctions.

At a recent government meeting, Sergei Glazev, Putin’s economic advisor, told other officials that a cryptoruble could serve as a ‘useful tool’ to circumvent crippling international sanctions.

In quotes reported by the Financial Times , Glavez said:

This instrument suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions.

The FT report also cites Moscow officials stating that President Putin commissioned work on developing and establishing a cryptocurrency. The cryptocurrency would, in essence, be the digitized equivalent of the fiat ruble “but its circulation would be restricted in a certain way,” Glavez added. The official stopped short of revealing further details but did confirm that the Kremlin would have complete oversight of the cryptocurrency.

CCN.com reported a closed-door meeting between Putin and Moscow’s political elite in mid-October wherein Russian communications minister Nikolai Nikiforov first revealed Putin’s mandate to create a national cryptocurrency. The cryptoruble will be developed and issued “quickly”, Nikiforov said.

“I so confidently declare that we will launch the cryptoruble for one simple reason: if we do not, our neighbors in the Eurasian Economic Community will do it in 2 months,” the minister added at the time.

Crucially, the cryptocurrency cannot be mined and can therefore only be issued – presumably by the central bank. The Central Bank of Russia (CBR) has notably experimented a number of digital currency pilots toward a national cryptocurrency in 2017.

Putin, who became acting president of Russia in 2000, has already announced his candidacy  for a second consecutive term and the fourth term overall during the upcoming presidential elections in March and April 2018.

In October 2017, Putin acknowledged cryptocurrencies “are becoming or have already become a full-fledged means of payment, as well as a means of investment” in a number of countries around the world. They come with “significant risks” as well, Putin added. In the coming weeks, Putin approved a framework calling for the regulation of initial coin offerings (ICOs) and cryptocurrency mining in Russia.

Featured image from Shutterstock.