Russia’s Qiwi to launch own cryptocurrency in 2016

MOSCOW, Sep 16 (PRIME) -- Russia’s Qiwi, a payment system operator, will start issuing so-called “bitrubles” in 2016 on the basis of the technology of bitcoins, the world’s most popular cryptocurrency, but local officials oppose the idea in fear of possible terrorism financing and money laundering, business daily Kommersant reported Wednesday.

Qiwi has already started designing the “bitruble” and the project may require several hundreds of millions of rubles under a preliminary estimate, the company’s CEO and co-owner Sergei Solonin told the daily.

At present, only the central bank is authorized to emit money in the country, law firm Herbert Smith Freehills’ advisor Stanislav Grigoryev said. “That is why they cannot launch the cryptocurrency without the regulator’s permit,” he said, as quoted by the daily.

Solonin said that Qiwi had held unofficial meetings on the matter with representatives of the central bank. “One more discussion of the topic with the central bank is arranged for the coming days. Besides, we submitted a letter with a description of the project to law enforcement entities,” he said. Dates of the cryptocurrency launch will depend on the regulator, he said.

A central bank spokesperson said that the regulator’s Chairwoman Elvira Nabiullina had repeatedly said that cryptocurrencies could be used for dubious operations, and the bank was studying the matter closely and could supervise the sphere in case of necessity.

Qiwi plans to exploit either the blockchain technology on which the bitcoin system is based or bitshares, a kind of a decentralized cryptocurrency exchange. Qiwi is testing these platforms and adjusting them to the Russian law. “For example, we are working at the creation of a system of identification of cryptocurrency users,” Solonin said.

The company will implement certain elements of blockchain or bitshares at the beginning of 2016 and this will significantly cut prime costs of existing processing services and transactions of traditional currencies. The technologies could modify the environment of traditional property relations allowing users to safely transfer rights for property, securities and other assets, Solonin said.

At present, the volume of digital money turnover reaches U.S. $3.8 billion worldwide.

Later on Wednesday, financial ombudsman Pavel Medvedev said the emission of “bitrubles” should be viewed as a criminal offense, but Anatoly Aksakov, chairman of the economic policy committee at the State Duma, the parliament’s lower house, said that it is ineffective to fight against new virtual currencies.

Many cryptocurrencies have recently emerged, and they are emitted in many countries of the world. “I think that such efforts will continue and, in my view, it’s pointless to impede their implementation. The scientific and technical progress evolves and, obviously, an intention to use new payment tools will constantly appear along with the development of technologies,” Aksakov said.

“I think that the central bank should study this practice very attentively and, if necessary, offer ways to govern and use such tools either via a law or regulations.”

The sphere should be subject to regulations, because similar payment tools can be used by fraudsters.

“These new tools could be more effective. The Internet commerce, for example, is actively developing all around the globe. Limitations, which exist in our country, often slow down the expansion of commerce, which is known to be a stimulant to progress,” Aksakov said.

End