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Russia: Putin talks about regulation and says no to a state crypto
Russia: Putin talks about regulation and says no to a state crypto
Regulation

Russia: Putin talks about regulation and says no to a state crypto

By Marco Cavicchioli - 29 Apr 2020

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The case of crypto regulation in Russia is enriched by new information provided directly by President Vladimir Putin

The Russian regulatory framework for cryptocurrencies is in the process of being released, but it will particularly concern real cryptocurrencies, those decentralized or issued by private individuals. 

A very different matter is that of state cryptocurrencies. In fact, in reality, these are not real cryptocurrencies, but central bank digital currencies, i.e. CBDCs. 

In this regard, recently during a Q&A session, Russian President Vladimir Putin said that it is impossible for Russia to issue its own crypto, and indeed it is impossible for any country to issue one. 

Putin had already expressed this view almost two years ago and this time he has done nothing but reiterate it. 

There are two problems with the hypothetical issuing of a fully-fledged state crypto. 

The first is that expressed by Putin himself, namely the fact that a true cryptocurrency cannot be national, cannot be issued and controlled by a nation, because it is by definition global and without borders. 

Therefore it is simply impossible that a true cryptocurrency can be completely controlled by a single state. 

The fact is that the term cryptocurrency should technically mean only those that are decentralized, issued and managed by a protocol that is not controlled by anyone. For this reason, it is impossible for a state to issue a decentralized cryptocurrency under its own full control. 

The second reason is that there is a feasible alternative, but it does not fall within the definition of a crypto. 

It is precisely CBDCs, the centralized digital currencies issued by central banks. These digital currencies are not cryptocurrencies at all, even if they take advantage of some of their technical characteristics. 

Although on the one hand, they share part of the technologies used for the basic technological infrastructure on which they work with real cryptocurrencies, from a financial, monetary and political point of view they are something else entirely. They are therefore digital versions of traditional fiat currencies and not cryptocurrencies

President Putin knows this difference, and he has simply taken another opportunity to reiterate it. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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