Russia’s State Duma Committee Likely to Launch State-backed Cryptocurrency

Russian radio news station Govorit Moskva recently reported that Russia’s State Duma Committee on Financial Markets is likely to launch a state-backed cryptocurrency soon. The currency would be pegged 1:1 to the Russian ruble.

Chairman of the committee, Anatoly Aksakov, while speaking at a press conference on the rise of household debt load, claimed that the government would soon come up with a cryptocurrency. He further explained that the central bank of Russia would issue the cryptocurrency as it will be backed by fiat currency.

Elaborating on the working module of the new cryptocurrency, Aksakov said that the cryptocurrency warrants a certain amount of funds to be deposited in a bank to ensure backing. Following that, a banking institution would issue a corresponding amount of crypto assets by using blockchain technology and adhering to the 1:1 proportion.

Aksakov’s revelation comes almost a week after a Russian mining and smelting company announced that it would be launching its own stablecoin backed by metals. The coin would strive to “market a cryptoasset with less volatility than the well-known cryptocurrency [bitcoin], and a more obvious connection with real values.”

In late October, Aksakov warned major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) about their impending ‘bleak future’ since they are not backed by anything. He added that this was a prime reason behind amending the Russian draft law “On Digital Financial Assets” by removing the definition of ‘crypto mining’ from its purview.

Throughout 2018, discussions, analysis and predictions were made regarding the purported Russian ‘CryptoRuble.’ According to the Financial Times, President Vladimir Putin has reportedly commissioned officials to initiate the steps towards establishing a state-backed cryptocurrency.

The idea of launching CryptoRuble was announced in early 2018, with the Russian Association of Cryptocurrency and Blockchain (RACIB) claiming that the coin will be launched in the middle of 2019.

Last month, crisis-driven Venezuela also launched the state-owned cryptocurrency ‘Petro.’ The government’s objective behind this was to ensure the development of an independent, transparent, and open digital economy coupled with the direct and active involvement of citizens.

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