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Russian President Vladimir Putin has instructed his cabinet to explore development of an official cryptocurrency, or the cryptoruble, to help the Russian Federation avoid Western sanctions levied for Russia’s annexation of Crimea and the conflict in the Donbass region of East Ukraine.
“This instrument suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions,” said Sergei Glazev, an economic adviser to Mr Putin, reported the Financial Times.
Glazev added the new cryptocurrency would be “the same rouble, but its circulation would be restricted in a certain way”.
The Kremlin has recently issued regulations regarding use of cryptocurrencies by the public, disappointing many due to the nature of the new rules, feeling they are too restrictive.
As the Kremlin realizes there may be anti-sanction possibilities, the development is a double-edged sword as coin offerings can be used by private citizens, or organized crime, to get around government law enforcement or security surveillance.
One huge concern is the use of cyrytocurrencies to finance terrorism. Russia has experienced a spate of infrastructure and soft-target bombings in recent years as the Syrian campaign heated up. The Caucasus, the soft underbelly of Russia is a hotbed of Islamic extremism.