A small rural community, situated about 80kms from Moscow in the Yegoryevsky District, are starting to ditch the ruble in favor of a new type of cryptocurrency – the kolion.
Ten years ago, a cancer diagnosis inspired Mikhail Shlyapnikov to ditch his banking career for a more rural lifestyle. Setting his sights on restoring a dying village to its former vitality, Mikhail moved out of the city to pursue the country life.
Setting up a plant nursery in the district required funds, which the bank was willing to lend, but at an exorbitant 12% interest.
Mikhail, determined not to be a slave to any financial institution, decided to invent his own style of currency. The kolion started life as paper currency in 2014, but the Russian courts quickly banned it in 2015. Undeterred Mikhail set about creating a crypto version of the currency, and in April 2017 he raised $500,000 as part of his ICO (initial coin offering).
Kolions use a different system to the traditional mining used in cryptocurrencies such as bitcoin. To obtain digital kolions you can purchase them using other cryptocurrencies, or you can earn them through a process known as “plowing,” – working with the residents of Kolionovo to help with their farming and construction jobs.
Currently, there are nearly 100 hundred farmers and suppliers using the kolion currency for local transactions. The rising value of the ICO puts the current total worth at $2 million, with Shlyapnikov adding that kolions are backed by a reserve of 500 bitcoins (which roughly equates to a value of USD 3.79 million at the time of writing).