- Russia is looking into creating a cryptocurrency for oil settlements.
- The initiative will not gain traction without a clear legislative framework.
While the Russian Duma is still meddling with the adoption of cryptocurrency legislation, the private sector is engaged in the initiatives focused on creating an oil-backed cryptocurrency.
The investment corporation Energia, headed by Igor Yusufov, the former Energy Minister of the Russian Federation has been developing an oil-backed cryptocurrency. The road map of the project is at the final stage; however, further progress is hardly possible without a legislative framework.
According to Mr. Yusufov, Neft-coin will allow Russia to escape US sanctions and optimize oil trading by removing risks related to foreign exchange rates fluctuations and transaction costs.
While such oil-backed cryptocurrency may prove to be beneficial to Russia and its OPEC allies that control over two-thirds of the oil market, the viability of the project is somewhat questionable.
Many experts are concerned that Russian Neft-coin will repeat the unhappy fate of Petro, Venezuelan cryptocurrency backed by the country’s oil reserves. Petro is not accepted as a means of payment by Venezuela’s trading partners. Moreover, even the citizens prefer to stay away from it as it is controlled by the government.
Meanwhile, devising a cryptocurrency to escape the US sanctions has become a trend among the countries in Washington’s blacklist. Many cryptocurrency experts believe that these developments will promote digital money on a scale, even if state-backed coins fail.