Russian Official: Payment Giant Qiwi's Digital Currency Idea 'Illegal' – The Basics about Cryptocurrency

A Russian government official has spoken out against a leading domestic payments company’s plan to release its own digital currency sometime next year.

Reports by Russian-language news services Kommersant and Pravda suggest that QIWI, a Moscow-based payments firm, is working to develop a bitcoin-like currency that will be a virtualization of the ruble. Sergei Solonin, QIWI’s CEO, told Kommersant in an interview that the concept could be deployed as early as next year.

However, a report from state-owned news service TASS suggests that Russian officials aren’t warm to the concept.

According to TASS, Russian financial ombudsman Pavel Medvedev dismissed the concept as against the country’s laws, stating during a radio appearance:

“It’s absolutely illegal, such technical hooliganism [is] absolutely inappropriate. The Constitution says who has the right to Russia to issue money – it is the central bank. The only currency in Russia is the ruble.”

QIWI, according to financial statements published in March, oversaw $11.5bn in payments volume during 2014 and total adjusted net revenue of $157.1m over the course of that year.

The news comes as bitcoin and digital currencies experience significant headwinds in Russia. Earlier this summer, Russian president Vladimir Putin spoke of the “serious, really fundamental issues related to its wider usage” when speaking of types of electronic money, including bitcoin.

It remains clear whether QIWI’s digital currency dream becomes a reality. Despite the hope for a launch in early 2016, Solonin reportedly said that the outcome will depend largely on the response from Russian authorities – of which Medvedev’s on-air response could be the first of a number of criticisms.

Notably, Solonin indicated that the company was developing a kind of user identification system that would complement the digital currency.

QIWI did not immediately respond to a request for comment.

Image via Shutterstock