Vladimir Putin’s government is seeking ways to establish a cryptocurrency that could help it dodge sanctions, it has been reported.
The Kremlin is said to be looking into the blockchain technology behind bitcoin as the basis for a “cryptorouble”.
At a recent meeting of Russian government officials, President Putin’s economic advisor, Sergei Glazev, said a crytptocurrency could be useful to carry out “sensitive activity on behalf of the state”, according to the Financial Times. “We can settle accounts with our counterparties all over the world with no regard for sanctions,” Mr Glazev reportedly said.
A state-sanctioned cryptocurrency would represent a change in tactics by Mr Putin. In October he threatened websites selling digital currencies with closure, saying that bitcoin and its rivals were risky and used for crime.
“The usage of cryptocurrencies carries serious risks. I know the central bank’s position on that,” Mr Putin said.
He added: “Crypto-currencies are issued by an unlimited number of anonymous bodies. Thus buyers of cryptocurrencies could be involved in unlawful activities,”
Also last month, Russia’s central bank deputy governor, Sergei Shvetsov, told a conference in Moscow that the currencies were “dubious”, according to Reuters.
“We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors),” Mr Shvetsov said.
Bitcoin and other cryptocurrencies, such as ethereum, provide a level of anonymity that has made them attractive as ways to launder money and carry out criminal activities such as buying and selling drugs online.
They also offer a financial system that is decentralised and not under the influence of any state or central bank.
But that may be under threat as governments increasingly seek to regulate digital currencies following a huge surge in their values in 2017. Bitcoin jumped from under $1,000 at the start of the year to almost $20,000 in September before falling sharply. It was trading around $13,500 on Tuesday.
Russia is not the first country that is reportedly investigating the possibility of launching its own digital currency. Sweden’s Riksbank has looked into creating an electronic version of the krona and Venezuela’s government said last week that it was close to launching its own oil-backed cryptocurrency in a bid to inject stability to the crisis-hit country.
We’ve teamed up with cryptocurrency trading platform eToro. Click here to get the latest Bitcoin rates and start trading. Cryptocurrencies are a highly volatile unregulated investment product. No EU investor protection. 75% of retail investor accounts lose money when trading CFDs.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies