Qiwi, a Russian payment system operator, plans to begin issuing a cryptocurrency called “bitrubles” in 2016 and has met opposition from local officials, according to Kommersant, the business daily, and PRIME, a Russian news service. Officials fear the cryptocurrency could fund terrorism and money laundering.
Sergei Solonin, CEO of the company, said Qiwi has already started designing the “bitruble” and the project may require several hundred million rubles.
Only the central bank is authorized to emit money in the country, according to law firm Herbert Smith Freehills’ advisor Stanislav Grigoryev. “That is why they cannot launch the cryptocurrency without the regulator’s permit,” he said.
Solonin said Qiwi has met with representatives of the central bank. “One more discussion of the topic with the central bank is arranged for the coming days,” he said. “Besides, we submitted a letter with a description of the project to law enforcement entities.” Dates for the cryptocurrency launch will depend on the regulator, he said.
A central bank spokesperson said Elvira Nabiullina, the regulator’s chairwoman, has repeatedly said cryptocurrencies could be used for dubious operations, and that the bank is studying the matter and could supervise the sphere out of necessity.
Qiwi plans to use either the block chain technology on which bitcoin is based or bitshares, a type of a decentralized cryptocurrency exchange. Qiwi is testing the platforms and adjusting them to the Russian law. “For example, we are working at the creation of a system of identification of cryptocurrency users,” Solonin said.
The company will implement certain elements of the block chain or bitshares at the beginning of 2016. This will cut the costs of processing services and transactions of traditional currencies. Solonin said the technologies could modify the environment of traditional property relations and allow users to safely transfer rights for property, securities, and other assets.
Pavel Medvedev, a financial ombudsman, said the emission of “bitrubles” should be viewed as a criminal offense. But Anatoly Aksakov, chairman of the economic policy committee at the State Duma, the parliament’s lower house, said fighting new virtual currencies is ineffective.
“I think that such efforts will continue and, in my view, it’s pointless to impede their implementation,” Aksakov said. “The scientific and technical progress evolves and, obviously, an intention to use new payment tools will constantly appear along with the development of technologies. I think that the central bank should study this practice very attentively and, if necessary, offer ways to govern and use such tools either via a law or regulations.”
Featured image from Shutterstock.