Speak to the uninitiated about crypto and one question that often comes up is “what’s to stop governments launching their own cryptocurrencies?” The answer, of course, is nothing.
Indeed, in February of this year Venezuela became the first country to launch a state-backed digital currency. The pre-mined Petro token, based on the NEM blockchain, suffered significant setbacks both pre- and post-launch and attracted widespread criticism, most of all from members of the cryptocurrency community itself.
For some months now there have been rumours circulating of Russia dipping its toe into the world of cryptocurrency, and yesterday Vladimir Putin commented on the possibility as part of his “Direct Line” live address. Reports suggest that Russia has been discussing the potential for a “CryptoRouble” since as early as 2015. Putin held a meeting in October last year to discuss the future of crypto in Russia and subsequently met with Ethereum founder Vitalik Buterin. He has been outspoken on the issue of a Russian cryptocurrency.
Of course the potential benefits of the crypto space are huge, and no state will want to be left behind as digital currencies’ influence grows. One of Mr Putin’s economic advisers, Sergei Glazev, is quoted as saying that a cryptocurrency would be very suitable “for sensitive activity on behalf of the state” and Mr Putin has noted the “need to use the advantages that are offered by new technological solutions in the banking sphere.” He does concede, however, that a cryptocurrency “goes beyond borders” and for this reason cannot be owned by a centralized state.
