Russian President Vladimir Putin this week, during Russian Energy Week, on cryptocurrencies. Putin responded, among other things, to the question of whether crypto could be used as an alternative to the dollar.
“Crypto has a right to exist”
Putin’s comments to reporters’ questions point to a new tolerance of cryptocurrencies by Russia. It should be noted that “crypto has a right to exist”. The Kremlin recently removed US dollar assets from its sovereign wealth fund. This is part of their plan to eliminate dependence on the US dollar. Putin’s latest comments reiterate the government’s stance to move away from dependence on the dollar. But, Russia hasn’t always been pro-crypto.
Despite the fact that cryptocurrencies such as Bitcoin became legal in 2020, the use of digital assets in payments was banned. One of Russia’s largest banks, Tinkoff, has said it wants to offer cryptocurrency trading to its customers, despite the Russian central bank’s anti-crypto stance. Oliver Hughes, CEO of Tinkoff, commented in September:
“There is currently no mechanism for us to offer them that product in Russia because the central bank has a very strong view on it.”
The Bank of Russia recently issued a new list of requirements for banks to detect suspicious crypto transactions. They also advised against listing securities linked to crypto assets on Russian exchanges.
Bitcoin as an alternative to the dollar
The recent statements of the Russian leaders on cryptocurrency bode well for crypto adoption. Putin added:
“I believe the US is making a big mistake by using the dollar as a sanctioning tool,” he said. “We are forced. We have no choice but to switch to transactions in other currencies… this dollar is a competitive advantage. It is a universal reserve currency and the United States today uses it to pursue political goals. As a result, they harm their strategic and economic interests.”
Putin’s comments appear to be a positive step for crypto adoption in Russia. Still, the Russian leader added that it is “too early to talk about crypto energy resource trading”. He said this in response to a question from a CNBC reporter about whether Bitcoin or another cryptocurrency could be used as an alternative to the dollar when trading oil.
However, the suggestion of tolerance for cryptocurrencies in Russia could be marred by proposed legal restrictions that will give crypto the status of accredited investors. If this proposal goes through, it will exclude retail investors from participating in the crypto market.