Russian banks aim to create cryptocurrency

Russia's Central Bank, as well as other financial experts, have recently expressed an interest in creating Russia's very own cryptoruble.

Russia's Central Bank, as well as other financial experts, have recently expressed an interest in creating Russia's very own cryptoruble.

The Deputy Governor of the Central Bank of the Russian Federation, Olga Skorobogatova, recently expressed the bank's interest in creating a national cryptocurrency. During a press conference at the Finopolis Forum of Innovative Financial Technologies, Skorobogatova told reporters that a national cryptocurrency would encourage non-cash and electronic payments, including international payments. In addition to cryptocurrencies being able to stimulate electronic payments, Skorobogatova added that it is becoming increasingly convenient for users to pay for all goods and services using electronic wallets, instead of traditional cash. Skorobogatova stated that implementing a national cryptocurrency could greatly encourage the already growing trend of electronic payments.

Skorobogatova emphasized that the central bank’s main focus in the transition would be educating Russian citizens about cryptocurrencies, especially considering the recent case of fraudulent bitcoins that were sold near a supermarket in Obninsk, near Moscow. According to the central bank’s head of Consumer Protection Services, Mikhail Mamuta, the central bank will focus on increasing the general financial literacy among its users to minimize damage.

Reports circulated last week that the Russian finance ministry proposed to add digital currencies to Russian citizens' financial literacy strategy. The strategy is reported to become implemented between 2017 and 2023, and was developed by the ministry and the World Bank.

Other Russian officials have also emphasized the growing need to implement a Russian national cryptocurrency, including First Deputy Prime Minister, Igor Shuvalov. According to Shuvalov, introducing a national cryptocurrency will strengthen the Russian economy. In an interview with RBC, Shuvalov confirmed his belief in the benefits of creating a national cryptocurrency and stated that he believes a cryptoruble should exist.

Up until now, the central bank has been firmly against the legalization of cryptocurrencies, including bitcoin. During a meeting between President Vladimir Putin and representatives of Russian business organizations and interests, the central bank's governor, Elvira Nabiullina stated that legalizing cryptocurrency would result in a loss of control of money from abroad.

This sentiment echoes the central bank’s previous policy regarding digital currencies. The bank firmly declared that using any monetary surrogate within the Russian Federation is strictly prohibited. The bank emphasized that the only recognized currency within the Russian Federation is the ruble.

Skorobogatova addressed the concerns of national leaders and business representatives by acknowledging that the anonymity cryptocurrency has had in the past. This anonymity allowed for money laundering and terrorist financing. However, she also stated that no regulator has yet answered the question of this association.

According to Skorobogatova, the central bank is currently investigating viable options for creating a cryptocurrency that will adhere to the Russian economic framework. The committee will present their possible approaches towards the end of November.