Russia is Looking to Create a Gold-Backed National Cryptocurrency

By Prashant Jha

The central bank of Russia is looking into creating a gold-backed cryptocurrency which will be used for settlements with foreign partners. The idea came from the Governor of the Bank of Russia Elvira Nabiullina who proposed the idea at the State Duma on Thursday.

The idea of gold-backed national crypto is just a proposal, however, the head of the central bank made it clear that settlement using national fiat is still the priority of the state. Elvira Nabiullina clarified that the proposal in just a raw idea and the promotion of the national currency is still the most important goal.

Russian regulatory bodies have been quite passive towards the use of cryptocurrencies in the national financial sector. Nabiullina also noted the same while speaking at Duma and said that regulators would not really like the idea of digital assets being used in the banking sector.

Russian President Putin had been asking the regulators to finalize their crypto bill to provide clarity over the state of cryptocurrencies in the country. However, just like India, even Russian regulatory bodies have been delaying the regulatory framework for quite some time now. Earlier this week the news arrived that the State Duma had been forced to delay its decision on the adoption of long overdue digital asset bill.

The reason for the delay is that the Financial Action Task Force (FATF) need more time to expand the technology of the proposed legislation including the definition of cryptocurrencies.

Russia Passive on Cryptocurrencies

Russia has become a center for crypto mining operations given the dearth of surplus clean energy available at low prices as well as the climate condition. However, the same can’t be said on the use of cryptocurrencies in the country. Despite numerous rumors about the finalization of regulations, it got delayed every time for one reason or another.

Looking at the state affairs of Russia, there are minimal chances that the country would allow the use of cryptocurrencies for its citizens. Recently, Russia was also preparing to look for alternative modes of communication without the internet, as the country went into a complete internet shutdown mode. Thus, a central bank issued crypto is the best possibility that the country can hope for.