Russia Will Develop Its Own Cryptocurrency to Avoid U.S. Sanctions

Russian officials have ordered development of a new cryptocurrency so that they could move money out of the country and evade international sanctions. Russian President Vladimir Putin’s economic adviser Sergei Glazyev explained that the instrument suits them for sensitive activity on behalf of the state.

“We can settle accounts with our counterparts all over the world with no regard for sanctions,” he said during a government meeting.

The development of the “cryptorouble” was ordered by Putin and it would be an online version of Russia’s currency, but officials say that the final product is a long way off, Newsweek reports.

In the past, Putin was a skeptic of digital currencies, but he has already ordered his cabinet to devise a regulation framework for cryptocurrency use in Russia. Russian Finance Minister Anton Siluanov promised in September that his department would begin regulating cryptocurrencies by the end of 2017.

People who want to hide their identities during business transactions often use cryptocurrencies which can be converted into regular currencies anonymously. Official Moscow has signaled that its currency, which is about to be developed, will be regulated and monitored by the Kremlin in some way.

Putin started to get interested in cryptocurrencies after meeting Vitalik Buterin, a Russian-born billionaire who founded the software platform Ethereum. The Russian president has many reasons to want to move money under the radar. The U.S. imposed sanctions against Russian businessmen and many believe that the sanctions are hurting Putin personally by constraining his ability to move funds abroad.

The first set of sanctions – the Magnitsky Act – were implemented in 2012. Afterwards, the U.S. and the European Union levied sanctions against Russia in 2014 for the violation of Ukraine’s sovereignty. The alleged Russian meddling in the 2016 presidential election brought the latest sanctions.

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