President Vladimir Putin spoke on the subject of cryptocurrencies at the Russian Energy Week event this week. The controversial president responded to questions by CNBC including whether crypto could be used as an alternative to the dollar.
Putin’s comments to reporters questions signals a new tolerance of cryptocurrencies by Russia, noting “crypto has a right to exist”. The Kremlin recently dropped US dollar assets from its sovereign wealth fund as part of its move away from US dollar reliance. The latest comments from Putin reiterate the government’s stance on moving away from reliance on the dollar, despite the fact that Russia has not always been pro-crypto.
Despite the fact that cryptocurrencies such as bitcoin were made legal in 2020, digital assets were banned from being used in payments. one of Russia’s biggest banks Tinkoff has said that they want to offer cryptocurrency trading to their clients, despite the anti-crypto stance of Russia’s central bank. Oliver Hughes,Tinkoff’s CEO, noted in September: “There’s no mechanism for us to offer that product to them in Russia at the moment because the central bank has got this very tough position”.
The Bank of Russia recently set out a new list of requirements for banks to determine suspicious transactions that included crypto transactions. They also advised against the listing of securities tied to crypto assets on Russian stock exchanges.
The Russian leaders recent statements on cryptocurrency bode well for the adoption of crypto in the Russian nation, Putin added:
"I believe the U.S. makes a huge mistake in using the dollar as a sanction instrument," he said. "We are forced. We have no other choice but to move 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, and they harm their strategic and economic interests as a result."
While Putin’s comments seem to mark a positive move for crypto adoption in Russia, the Russian leader added that it is still "too early to talk about the trade of energy resources in crypto", following a question from a CNBC reporter on whether bitcoin or another cryptocurrency could be used as an alternative to the dollar in trading oil.
The suggestion of tolerance of cryptocurrencies in Russia may however be marred by proposed legislative restrictions that will bring accredited investor status to crypto. If this proposal goes forward, it will exclude retail investors from participating in the crypto market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.