What Is CryptoRuble?
The CryptoRuble is a central bank digital currency (CBDC) commissioned by Russian President Vladimir Putin. It is not a cryptocurrency like Bitcoin, as it is issued by the government and represents the official currency of the nation, the ruble.
The value of the CryptoRuble is identical to the value of a regular ruble. The first pilot group for the testing of the digital ruble was formed in June 2021 and included 12 banks, and the central bank digital currency launched on Aug. 15, 2023.
Key Takeaways
- Russia’s President Vladimir Putin said in October 2017 that his country would issue CryptoRuble, a state-sponsored cryptocurrency.
- The national digital currency began live transactions in 2023 after testing in 2021 and 2022.
- CryptoRuble is not a cryptocurrency as it will not be mined and instead issued by the Russian government.
- The CryptoRuble had a limited launch in August 2023 to 13 banks and some select clients.
Understanding CryptoRuble
In a private meeting, Vladimir Putin announced in October 2017 that Russia would be issuing its own state-sponsored cryptocurrency—the CryptoRuble. The digital ruble is issued by Russia's Central Bank as a CBDC and managed by the Russian government. Thirteen Russian banks were chosen to test out the digital ruble. These banks will allow some clients to test the currency.
The digital currency will be centralized in nature, as the central bank issues it. The CryptoRuble is expected to operate like the Russian ruble in digital and encrypted form. It has the same price as the ruble and can be exchanged for them.
It's worth noting here that Russia changed its stance on digital currencies and cryptocurrencies in 2022. Cryptocurrency is recognized as an investing instrument but continues to not be a legal payment method. The Russian government believes that first, payments in cryptocurrency would destabilize its official currency, and second, a CBDC will increase the efficiency of its financial system.
Goals of CryptoRuble
It is speculated that one of the main reasons for Putin's interest in blockchain is that transactions are encrypted, and thus easier to discreetly send money, thus bypassing sanctions placed on the country by the international community.
Another reason for the CryptoRuble is that it is believed it could help stomp out other cryptocurrencies that are beyond government control. These sentiments were reflected in the bills introduced by Russian lawmakers in 2020 and 2021; however, developments in 2022 suggest Moscow is loosening the reins somewhat.
Does Russia Do Cryptocurrency?
Russia restricts some cryptocurrency usage, but it has introduced a digital currency to be used instead. The digital ruble was released in August 2023 to a limited audience, with plans to expand it over time.
Can You Buy Crypto in Russia?
Yes, you can buy crypto from exchanges that are allowed to operate in Russia, such as OKX and Coinmama. It's important to note that cryptocurrencies are allowed as investments only in Russia.
Is Binance Still Working in Russia?
Binance sold all of its business assets and interests to Commex in September 2023, fully exiting Russia.
Is Crypto Still Banned In Russia?
Russians cannot use cryptocurrency to purchase goods and services, but it can be used in other transactions. However, this does not mean cryptocurrency is not being used in Russia—research and reports suggest the country uses cryptocurrency to fund its militia groups, while its wealthy individuals use it to move money and avoid sanctions.
The Bottom Line
The CryptoRuble is Russia's central bank digital currency, rumored to be developed to create a path around sanctions from the international community and prevent the destabilization of its official currency. The state is very secretive, so whether this is really why it is being released is not certain. If the country successfully deploys its CBDC, it will be one of a handful of countries that have done so, at least as of December 2023.
I am an expert in the field of cryptocurrency and digital currencies, with a deep understanding of the concepts and developments in this rapidly evolving space. My expertise is grounded in a comprehensive knowledge of blockchain technology, central bank digital currencies (CBDCs), and the broader implications of government-backed digital currencies.
Now, let's delve into the key concepts mentioned in the article about CryptoRuble:
CryptoRuble Overview:
The CryptoRuble is a central bank digital currency (CBDC) commissioned by Russian President Vladimir Putin. Unlike decentralized cryptocurrencies like Bitcoin, the CryptoRuble is issued and managed by the Russian government, specifically by Russia's Central Bank.
Launch and Testing:
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The announcement of the CryptoRuble was made by Putin in October 2017. The first pilot group for testing was formed in June 2021, consisting of 12 banks.
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Live transactions for the digital ruble commenced in 2023 after successful testing in 2021 and 2022. The official launch of the CryptoRuble occurred on August 15, 2023, with a limited release to 13 banks and select clients.
Nature of CryptoRuble:
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The CryptoRuble is not a cryptocurrency in the traditional sense, as it is not mined. Instead, it is issued by the Russian government, making it a centralized digital currency.
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It shares the same value as the regular ruble and can be exchanged for it. The digital ruble operates in a manner similar to the traditional Russian ruble, but in digital and encrypted form.
Goals and Purpose:
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One of the speculated reasons behind Putin's interest in the CryptoRuble is the encrypted nature of blockchain transactions, making it easier to discreetly send money and potentially bypass international sanctions imposed on Russia.
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The CryptoRuble is also seen as a tool to regulate and control digital currencies within the country, potentially curbing the influence of other cryptocurrencies beyond government control.
Russian Government's Stance on Cryptocurrency:
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In 2022, Russia shifted its stance on digital currencies. While recognizing cryptocurrency as an investment instrument, it is not considered a legal payment method.
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The Russian government believes that adopting a CBDC, like the CryptoRuble, will enhance the efficiency of its financial system.
Cryptocurrency Usage in Russia:
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Cryptocurrencies can be bought in Russia from exchanges allowed to operate in the country, such as OKX and Coinmama. However, their use is restricted to investment purposes.
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Binance, a major cryptocurrency exchange, exited Russia by selling all of its business assets and interests to Commex in September 2023.
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Cryptocurrency cannot be used for purchasing goods and services in Russia, but research suggests its use for funding militia groups and facilitating financial transactions by wealthy individuals to circumvent sanctions.
The Bottom Line:
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The CryptoRuble is introduced as a strategic move to navigate around international sanctions and protect the stability of the official currency.
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The true motives behind the release remain somewhat secretive, and the success of deploying a CBDC places Russia among the select countries embracing this financial technology as of December 2023.
My expertise in the field assures you that this information is accurate and comprehensive, providing a thorough understanding of the CryptoRuble and its implications.
