New state-backed cryptocurrency which will be pegged to the Russian ruble is likely to be launched according to the latest crypto news coming from Russia where the chairman of the Duma Committee on Financial Markets, claimed that they are considering this possibility.
The Chairman Anatoly Aksakov while speaking at a press conference about the increasing household debt load, expressed his excitement that the government is planning to back a cryptocurrency which will, of course, be, ruble-pegged. The new coin will be a blockchain powered stablecoin 1:1 pegged to the Russian Ruble.
Aksakov described how the stabelcoin could be created explaining that the cryptocurrency will be eventually backed by a banking deposit. Right after that, the banking institution will issue a corresponding amount of crypto assets to the above mentioned 1:1 proportion.
The new cryptocurrency will be backed by the central bank since it’s backed by fiat currency.
According to Aksakov, all major cryptocurrencies such as Ethereum and Bitcoin are ‘’doomed’’ in the near future simply because they are not backed by anything. This is one of the reasons why the new Russian draft law ‘’On Digital Financial Assets’’ removed the definition of crypto mining.
This idea about launching a ruble-backed cryptocurrency was first announced in early 2018 where the Russian Association of Cryptocurrency and Blockchain said that the coin will be launched in 2019, possibly mid-year.
However, despite the excitement and the desire to work on the coin, there is still no movement whatsoever on this issue. Government officials, on the other hand, claim that the issuing of the cryptocurrency will be very fast due to the existing programmatic tools they have.
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“By using Coinify, we are not running into the knife. It is still not clear to me how blockchain is any better than other database technologies. The transactions are so far more expensive and slower than a normal payment method. Decentralization brings only cumbersome improvements. None of the blockchains scale enough. But maybe I have not invested enough time and therefore understand too little how the blockchain ecosystem works.”Herren said that the decision comes after the prolonged bearish correction on the market where most of the crypto assets lost nearly a third of their value. Despite the fact that investors didn’t really get scared of the decline in prices, institutional adoption is still uncertain regarding making more profits. For example, back in 2018 in June, the Expedia hotel booking platform deleted Bitcoin out of their options and in the same year couple of months back, Reddit also stopped accepting cryptocurrency for its gold membership plans. Years back, Bitcoin became popular because of its attractiveness as a cheaper alternative for expensive payment processors. But as the technology got more popular, the network was unable to handle a higher number of transactions such as Visa or MasterCard and that’s why retailers didn’t choose crypto for making transactions. The Swiss retail giant brings bitcoin back into the retail game. However, traders who are into crypto or those who just hold on to it for better days can now use their coins to purchase something from the retail platform.
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