Russian President Vladimir Putin has authorized officials to create a digital currency, or “cryptoruble,” that uses technology similar to bitcoin and could evade sanctions, according to reports.
Mr. Putin’s economic adviser, Sergei Glazev, recently told a gathering of Russian government officials that a digital currency could usefully carry out “sensitive activity on behalf of the state.”
“We can settle accounts with our counterparties all over the world with no regard for sanctions,” Mr. Glazev said, the Financial Times reported.
Tuesday’s report also claims approval of the project came from Mr. Putin. A possible new cryptocurrency, it adds, would be restricted so the Kremlin could track its movements.
Russia’s position toward bitcoin and more specifically the “blockchain” technology which makes anonymous digital currencies possible — has been seen by analysts as fluid.
In October, Mr. Putin noted bitcoin’s notoriety for use in criminal ventures, including money laundering and drugs trafficking, and threatened to close websites selling digital currencies.
“Cryptocurrencies are issued by an unlimited number of anonymous bodies,” he said. “Thus buyers of cryptocurrencies could be involved in unlawful activities. The usage of cryptocurrencies carries serious risks.”
Last month, Russia’s central bank deputy governor, Sergei Shvetsov, also called such currencies “dubious,” according to Reuters.
But over the summer, Mr. Putin ordered officials to work on regulating cryptocurrencies and the blockchain technology, which allows currencies to exist without the backing of a central bank or government. It does so by allowing multiple parties (or computers) to share and update a single, secure established record of each bitcoin’s existence.
Some experts note that the Kremlin’s approach to attempting to allow but control cryptocurrencies and blockchain technology is similar to its approach to allowing Russian limited use of the internet.
Last year, bitcoin’s price rose more than 1,500 percent, attracting headlines for surging from $1,000 to almost $20,000 before before a massive drop in December.
Economists called the surge a massive speculation bubble. On Tuesday, it was trading at roughly $13,500.
• Dan Boylan can be reached at dboylan@washingtontimes.com.
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