Russia has decided to begin work on a new national digital currency, the Bit-ruble, that will be managed and overseen by the state central banking system, according to late evening reports out of El Mundo in Spain.
Russia will work with Qiwi to build national digital currency system
As Cointelegraph reported earlier this week, Qiwi was planning on building a privately-run crypto-currency for the Russian market. This was met with a very negative response by the Russian Ombudsman, Pavel Medvedev.
“It’s absolutely illegal, such technical hooliganism absolutely inappropriate. The Constitution says who has the right to Russia to issue money; it is the (Russian) central bank. The only currency in Russia is the ruble. The rest of the money is illegal, and this kind of disgrace (would be) a criminal offense.”
It appears that Qiwi and the Russian central banking system have agreed to work together on this digital currency initiative that will take months to formalize. Many details need to be hashed out, including adjusting any laws governing digital currency use, the currency exchange rates with the fiat Ruble, and how to fund this operation, the cost of which may run into the hundreds of millions of Rubles.
The objective is to make a digital currency similar to Bitcoin, but with the strict oversight and regulation of the Russian Central Bank. Russian authorities have stood firmly against Bitcoin, even banning it’s use and the ability of news sites to transmit information about it into Russia. These bans have since been overturned in court. Authorities claim it is prone to money laundering and use by terrorist organizations for funding.
Russia may indeed become the first nation to create its own digital cryptographic currency, with the help of Qiwi. Ecuador has created an EMS, or Electronic Money System, but it is far from being an encrypted crypto-currency. It is built around the U.S. Dollar, the country’s de facto national currency, and the EMS would work more like Apple Pay than Bitcoin. In association with this EMS creation, Bitcoin was banned in Ecuador. The new nation of Liberland claims Bitcoin as its national currency.
A nation the size and influence of Russia moving aggressively towards their own cryptographic digital currency will certainly influence other nations to follow suit. It may also create a long term ban on Bitcoin within Russia, in defense of the new national digital currency. We’ll keep you informed on the progress of this ground-breaking initiative.
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