Russian Federation may launch its own state-issued cryptocurrency

Russia had previously threatened to ban cryptotrading and arrest cryptocurrency users | Chris Ratcliffe  Bloomberg via Getty Images

Russian Federation will issue its own official cryptocurrency, the CryptoRuble, capping months of speculation about the country's approach to the technology. "I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after two months our neighbors in the EurAsEC will", said Mikolay Nikiforov, Russia's Minister of Communications.

The Russian government strictly said that CryptoRuble can not be obtained illegally, it will be issued and tracked like other normal currency. But others have condemned bitcoin and other cryptos, citing their risk to average investors and their decentralized nature.

Officials said that once it is launched in a few weeks time, all other cryptocurrencies will be banned in the country.

Russian Federation has announced, via communications Minister Nikolay Nikiforov, that the country will begin experimenting with a nationalized cryptocurrency.

The Russian government has made it clear that if a CryptoRuble owner can not account for where they got it, they will be subject to a 13% tax.

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The CryptoRuble can be exchanged with rubles at any time, but if the owner cannot motivate its origins, a 13% tax will be charged. Earned differences between the initial purchase price and the sale price will be subject to the very same tax.

In particular, the business group urged parliament to consider legal amendments concerning government regulation on the issuance and circulation of cryptocurrencies, noting a number of dangers associated with virtual capital.

The CryptoRuble does appear to be blockchain-based, however, which ensures a degree of decentralization and could help prevent things like online fraud.

Russian officials said the Cryptoruble will be taxed and the tax will be applied to any appreciation in value that occurs. Cryptocurrencies are an area that Putin has shown a personal interest in. The landmark development makes Russian Federation the very first government in the world to official pursue virtual tender. In June, the Central Bank of Russia's Deputy Governor Olga Skorobogatova said testing of a national virtual currency has already taken place on a distributed ledger called "Masterchain".

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