Russian Federation to issue state-backed CryptoRuble digital currency

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Nikiforov said, "I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will".

The CryptoRuble might put an end to some of crypto's most challenging weeks in Russian Federation, where the government blocked cryptocurrency exchanges despite a repeated show of interest for digital cash.

Recent reports indicate that Russian Federation is getting ready to launch its own digital currency, the CryptoRuble, thereby confirming numerous rumors about Russia's plans in the area of blockchain technology.

Regular paper Rubles will be exchangeable for CryptoRubles at any time.

Russian officials said the Cryptoruble will be taxed and the tax will be applied to any appreciation in value that occurs.

The decision to launch the new currency - which will use Russian designed encryption.

According to the report, it will not be possible to mine the new virtual currency, which will be controlled and maintained by state authorities. The same tax will apply to any earned difference between the price of buying a token and the sale price. The online economy has made it hard and a concern for governments to collect taxes on an increasing digital sales industry.

In June this year, Olga Skorobogatova, Deputy Governor of the Central Bank of Russian Federation, stated that "regulators of all countries have come to the conclusion that it is necessary to do a national virtual currency", adding that each country would have to "decide the issue of a specific time and maturity independently".

At a meeting with financial leaders in Sochi last week, he blasted it for being "risky and used for crime". In June, the Central Bank of Russia's Deputy Governor Olga Skorobogatova said testing of a national virtual currency has already taken place on a distributed ledger called "Masterchain". "A truly decentralized control of the money supply as offered under the senior free market crypto currencies offers a more viable solution".

Mr Putin's calls for more regulation sent the price of bitcoin soaring.

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