Russia Is Developing “Cryptoruble” Token on Ethereum

A “cryptoruble” that developers claim would increase Russians’ access to international exchanges and be employed for cross-border payments is now under development. The project’s sponsor, DeFi platform Indefibank, claims that the token will be tied to the national fiat but separate from a government-issued digital ruble.

According to Sergey Mendeleev, CEO of decentralized finance (DeFi) banking platform Indefibank, work is already underway in Russia to introduce a “tokenized cryptoruble” on the Ethereum blockchain. He made this announcement at the Blockchain Life 2022 conference. He explained that the token would be issued via a decentralized smart contract with surplus collateral or under the DAI stablecoin’s paradigm. It will have a 1:1 exchange rate with the Russian ruble. Forklog, a source for cryptocurrency news, cited Mendeleev as saying:

“A user can either independently issue a cryptoruble by placing sufficient collateral in the form of stablecoins or cryptocurrency on the balance of a smart contract, or purchase it from an authorized exchanger for fiat.”

The amount of collateral will have a direct impact on the entire supply. Indefibank estimates the potential market size among private persons to be between 5 and 10 billion rubles (about $82 – $160 million). The creators of cryptoruble anticipate that additional cryptocurrency enthusiasts will support the initiative and that, eventually, the project will stand alone as a decentralized autonomous organization (DAO). The central bank digital currency (CBDC) produced by the Bank of Russia will have no connection to the cryptoruble, which is a means of payment.

Russia’s central bank promised to push its virtual currency into international commerce after the government recently acknowledged that it would require cryptocurrencies to avoid sanctions. The regulator raised misgivings about the necessity of legalizing private digital currencies and made it plain that talks do not pertain to permitting domestic crypto payments. According to Indefibank’s CEO, Russian legislation does not mandate that the creation of a DAO and issuing of ERC20 tokens be coordinated with the central bank. If the monetary authority objects to using the word “ruble,” the corporation is prepared to modify the cryptocurrency’s name.

Mendeleev claimed that the cryptoruble would make it simpler for Russians to enter international markets and pay with foreign partners. The report indicates that the token’s creators have already developed an MVP, with unveiling the finished product scheduled for October.

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