Former Russian Energy Minister Igor Yusufov is proposing an oil-backed cryptocurrency. Yusufov’s project could stand to benefit from a new set of cryptocurrency regulations that the lower house of the Federal Assembly of Russia, also known as the Russian State Duma, is planning on adopting in March. Both pieces of news were originally published in online Russian news source Rambler on February 21.
The new cryptocurrency regulations are in the “final stage of development,” according to Oleg Nikolayev, a member of the State Duma Committee on Economic Policy. The report stated that the regulations are intended to support the development of the blockchain and cryptocurrency industries in Russia.
Yusufov Believes Project Would Benefit All OPEC Countries
The launch of Yusufov’s project may coincide with the passage of the regulations into law; Yusufov stated that the oil-backed cryptocurrency is in the final stages of development.
In an interview with Rambler, Yusufov said that the introduction of his oil-backed cryptocurrency “hypothetically allows us to avoid the costs associated with the use of currencies that are not backed up – the unpredictability of exchange rate fluctuations, the commission for currency exchange, [and] trade restrictions.”
Yusufov also implied that his project would not be specific to Russia, but would extend throughout the OPEC (Organization of Petroleum Exporting Countries) region. “Such a union in [the countries’] own interests will be not only logical, but also economically justified.”
John Slyusarev, a managing partner at SMC Capital, told The Block that an oil-backed cryptocurrency could also decrease the influence of the US economy on Russia. “This is also the reason why Venezuela created the Petro, which was designed to provide a way around U.S. sanctions,” he explained.
Russia’s ‘CryptoRuble’ Set to Launch This Year
Yusufov added that an asset-backed cryptocurrency is a smarter alternative to a so-called ‘national cryptocurrency’ backed by fiat. “Since the creation of private and national energy cryptocurrencies — a crypto-ruble, a crypto-dollar, and others — based on national currencies does not make economic sense,” he said.
But what is the purpose of the crypto ruble? Russia has talked openly in the past about how a national cryptocurrency could be used as a way to evade international sanctions. “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 advisor to Russian President Vladimir Putin, at a meeting in December 2017.