Is Digital Currency The Answer To Crimea? Presidential Advisor of Russia Answers

By Rishma Banerjee

An adviser to the President of Russia has recently proposed that the country adopt a digital currency in Crimea in order to attract investors and avoid sanctions, local news agency TASS reports April 19.

Sergey Glazyev, advisor to Russian Premier Vladimir Putin on issues of regional economic integration, emphasised that the government should look to adopting “digital money technologies” so as to reduce “cross-border barriers,” the official said at the Yalta International Economic Forum (YIEF).

Glazyev feels that the adoption of digital currencies will result in a sharp reduction of cross-border barriers” and will thus attract foreign investors who “are afraid of sanctions,” which are “generally carried out through the banks.”

The official reportedly elaborated that digital money such as stablecoins, which are pegged to gold or other physical assets, are able to “pass the border, and cannot be hampered by sanctions.”

Glazyev also suggested the creation of a “stable digital token” that would be pegged to cost per square meter in Crimea to raise funds for the large-scale construction of health resorts.

As per TASS, the Republic of Crimea has become the first region in Russia regarding the proportion of investments in the gross regional product (GRP).

In a speech that he recently delivered, Glazyev reiterated his positive stance on blockchain technology. In 2018, he noted the free nature of digital money, emphasising that it is not subject to any unpredictable sanctions and can reduce political risk.

The central bank of Russia has recently evaluated the potential benefits and drawbacks of central bank digital currencies (CBDC), noting that a significant disadvantage for CBDC’s users, is the lack of anonymity.

Russia, meanwhile still has not enforced any regulations related to the crypto industry, with Russia’s parliament, the State Duma, having recently denied consideration on the bill “On Digital Financial Assets.” Russian President Putin previously set a deadline for the government to adopt regulations for the industry by July 1, 2019.