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Russia’s First Deputy PM Supports a State Cryptocurrency

Last Updated March 4, 2021 4:59 PM
Samburaj Das
Last Updated March 4, 2021 4:59 PM

A major Russian politician has called for a Russian state cryptocurrency, revealing himself to be a supporter of the “crypto-ruble.”

In an interview with Russian publication RBC , Igor Shuvalov, Russia’s First Deputy Prime Minister spoke of his support for cryptocurrencies. The senior official specifically called for the creation of a “crypto-ruble”, a state-backed cryptocurrency that would, according to him, make the Russian economy stronger.

In roughly translated statements, Shuvalov stated:

I am a supporter, a crypto-ruble must exist…This theme will develop. But it should develop in such a way that the national economy cannot be put under attack, but rather make it stronger.

The Russian official’s comments come with months of the notable revelation that Russia’s central bank is already working on a national digital currency. Earlier in June, deputy chairwoman at Russia’s central bank Olga Skorobogatova claimed it was only a matter of time before countries adopted national digital currencies, whilst adding that Russia was working on certain pilot projects of its own.

Russia: A Bitcoin Mining Hub?

Intriguingly, Shuvalov also revealed that the Russian government had discussed the possibility of installing and operating mining centers at a state level. While there are no concrete projects yet – due to a lack of legislation and regulation of bitcoin and cryptocurrencies – Shuvalov confirmed that prospective locations were sought in regions with an abundance of energy resources. Bitcoin mining is an energy intensive process where profits are gained when the mining rewards exceed the cost of mining resources and electricity costs.

Shuvalov told RBC:

We talked about the future of this sector, given that it is developing so rapidly in the world. Talks included the question of generetocs of electric energy, near which it would be possible to put such [mining] centers.

These developments come within a year of Russian authorities proposing criminal penalties on bitcoin adopters and miners. In March 2016, the Russian Finance Ministry sought to push a controversial bitcoin ban bill which enforced prison sentences up to 7 years for bitcoin adopters.

After spearing the effort to ban bitcoin since 2014, Russia’s deputy finance minister Alexei Moiseev admitted this year that the government may seek to regulate the bitcoin industry in 2018. Such a move would, in effect, recognize and legalize bitcoin in the country.

In recent months, Russia’s largest online retailer announced plans to accept bitcoin for payments. Russia’s official standards authority has also begun work on developing blockchain standards, ahead of regulations expected to be established in 2019.

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