Putin plots "Russian bitcoin" to skirt Western sanctions

Here comes the “cryptoruble.”
January 4, 2018, 12:19pm

A Russian version of bitcoin could help Vladimir Putin circumvent Western sanctions, a Moscow economic adviser said Tuesday.

Creating the so-called “cryptoruble” would be a dramatic conversion for the Kremlin, which was threatening to jail bitcoin users less than 12 months ago.

Now Moscow is planning to fully embrace the cryptocurrency revolution.

“This instrument suits us very well for sensitive activity on behalf of the state,” Sergei Glazev, an economic adviser to the president, told a government meeting.

Advertisement

“We can settle accounts with our counterparties all over the world with no regard for sanctions.”

Glazev said the cryptocurrency would be “the same rouble, but its circulation would be restricted in a certain way,” allowing the Kremlin to track its every move.

There are no details on who will issue the “cryptorouble” but Russia’s central bank is already developing its own digital currency called masterchain.

The new cryptocurrency will likely be based on the ethereum protocol, after Putin met with Vitalik Buterin, the Russian-Canadian programmer who created the bitcoin-rival, last summer.

The news saw the price of ethereum hit a new all-time high this week.

In October, Putin asked his government to create legislation to regulate cryptocurrency mining and establish legal definitions for various digital assets — a move that will give the Kremlin greater control over development of the industry.

Speculation was already rife that Russia could use cryptocurrencies to avoid sanctions; in October a U.S. Treasury spokesperson told VICE News the agency was “aware of the reports” regarding Russia’s increasing adoption of cryptocurrencies, and that they are monitoring “evolving trends and new potential avenues for sanctions evasion.”