Developers are working on a “cryptoruble,” which, according to the developers, can boost Russians’ access to global markets and be used for cross-border payments. The project’s backer, Indefibank, says the token will be pegged to national fiat but independent of a state-issued digital ruble.
Cryptoruble Will Provide Another International Settlement Option for Russian Businesses
Sergey Mendeleev, CEO of decentralized finance (defi) banking platform Indefibank, revealed during the Blockchain Life 2022 conference that work is ongoing in Russia to develop a “tokenized cryptoruble” on the Ethereum blockchain.
According to the executive, the token will be issued via a decentralized smart contract with surplus collateral or based on the methodology used by the DAI stablecoin. It will have a 1:1 exchange rate with the Russian ruble. Mendeleev was 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 overall supply will be directly proportional to the amount of collateral. According to Indefibank, the potential market among private individuals is worth between 5 and 10 billion rubles (roughly $82 – $160 million).
The cryptoruble creators anticipate that more members of the crypto community will join the endeavor, with the project eventually becoming an independent decentralized autonomous organization (DAO). The cryptoruble will be a payment mechanism unrelated to the Bank of Russia’s central bank digital currency (CBDC).
Russia’s central bank, which recently decided that the country would require cryptocurrencies to avoid penalties, has pledged to promote the digital ruble in international trade. The regulator also stated unequivocally that negotiations are not about permitting domestic crypto payments and raised reservations about the necessity to legitimize private digital currencies.
According to Indefibank’s CEO, Russian law does not require the creation of a DAO or the issuing of ERC20 tokens to be coordinated with the central bank. If the monetary authority opposes the usage of the term “ruble,” the company is willing to modify the name of the cryptocurrency.
Mendeleev insisted that the cryptoruble would make it easier for Russians to access global exchanges and settle with overseas partners. According to the source, the token’s creators have already developed an MVP, with the final product likely to be presented in October.