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Russian Lawmaker Suggests Gold-Linked Cryptocurrency for Arms Exports

Last Updated March 4, 2021 3:36 PM
Samburaj Das
Last Updated March 4, 2021 3:36 PM

A senior Russian lawmaker has suggested that Moscow should turn to cryptocurrency, backed by gold, for payments in Russian arms exports to evade financial sanctions from the west.

Prominent lawmaker Vladimir Gutenev, first deputy head of the economic policy Committee at the State Duma (the Russian Parliament’s lower chamber), has urged the Kremlin to suspend treaties with the United States amid an escalating policy-war.

In April, the Trump administration talked up new sanctions  against Russia as punishment for the latter’s involvement in the Syrian conflict.

In a notice  the following month, the United States sanctioned six Russian entities for allegedly violating its weapons of mass destruction non-proliferation treaty.

Talking up an ‘asymmetric response’ to the United States, Gutenev called for the suspension of shared treaties with the U.S. including the non-proliferation of missile technologies, speaking to Russia’s largest news agency TASS .

Pointedly, the lawmaker called on the government to switch to a cryptocurrency as a means of avoiding U.S. dollar-based commerce and a dependence on the global interbanking system operated by SWIFT, an organization that has been influenced  by U.S. interests in the past.

The “U.S. attempts to thwart deals on Russian weaponry and civilian goods,” Gutenev told TASS, adding:

“[Russia should] consider the possibility of conducting transactions in cryptocurrencies that are linked to the value of gold. And I’m sure that this will be a very interesting option for China, India, and other states as well.”

The senior politician did not elaborate on details of the gold-linked cryptocurrency. The most notable crypto token directly backed by gold was launched by the British Royal Mint earlier this year. Dubbed the Royal Mint Gold (RMG), the blockchain crypto token was first announced in late 2016 and is backed by $1 billion in gold bars, nearly two tons of gold, stored in the Royal Mint’s vaults near Cardiff in Wales. A single RMG coin is worth its weight in one gram of gold.

In January, Australia’s biggest precious metals refinery, the Perth Mint, also announced the development of its own gold-backed cryptocurrency.

The lawmaker’s suggestion comes at a time when Russian president Vladimir Putin is widely believed to have ordered work on Russia’s own national cryptocurrency, dubbed the ‘cryptoruble’.

The Putin administration has backed a Russian state cryptocurrency.

As reported by CCN.com earlier in January, Putin’s economic advisor Sergei Glazev said the cryptocurrency would prove a “useful tool” in evading international sanctions.

In a meeting with Kremlin officials, Glavez reportedly 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.”

Russia has also been ‘accused’ of helping Venezuela develop and launch the ‘petro’, the world’s first state cryptocurrency that president Maduro claims is backed by the country’s vast oil reserves. The Kremlin has refuted the claim.

Russian missiles image from Shutterstock.