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Vladimir Putin sees value in cryptocurrencies, but it is too early to consider crypto-backed oil trades

Putin is looking to trade oil in currencies other than the U.S. dollar. (Image Source: CNBC)
Putin is looking to trade oil in currencies other than the U.S. dollar. (Image Source: CNBC)
Putin believes cryptocurrencies have the right to exist and may be used as a means of payment. However, there is no support for them as of yet, suggesting that these need to be regulated first. With the current economic restrictions dictated by the U.S., Russia is forced to move away from dollar-backed oil contracts. Putin is considering other currencies for oil trades, but cryptos are off the table for the time being.

Russia’s President Vladimir Putin shared his views regarding cryptocurrencies in a recent CNBC-moderated panel at the Russian Energy Week event. Cryptocurrencies were mentioned in relation to the economic sanctions that the U.S. continues to impose on Russia. In this respect, Russia is currently looking at moving away from dollar-backed oil contracts, and cryptocurrencies have the potential to replace the dollar in this type of trade. Russia is also planning to drop U.S. dollar assets from its sovereign wealth fund. Putin acknowledges that cryptocurrencies have value, yet “it is too early to talk about the oil trade in cryptocurrency.” For now, the Russian President does not believe cryptocurrencies can back oil contracts.

Putin pointed out that, even though cryptocurrencies “have the right to exist and can be used as a means of payment,” these are “not secured by anything as of yet.” Additionally, the Russian President expressed his concern that the cryptocurrencies’ massive consumption of energy could be seen as one of the major barriers to their use, plus they are too volatile. Still, Russia seems to be among the countries that show more tollerance towards cryptocurrencies, as Deputy Finance Minister Alexei Moiseev stated earlier this week that there are no plans for a blanket ban similar to how China cracked down on cryptocurrency transactions and mining.

This increased tolerance is also reflected in the latest Bitcoin mining statistics that show Russia as the world's third hashrate provider with 11.2% of the total , up 5.3 % since September 2019, mostly after the Chinese mining ban imposed this May. The U.S. is already the largest hashrate contributor with 35.4%, while Kazakhstan, a former member of the Soviet Union, is now second with 18.1%.

 

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Bogdan Solca
Bogdan Solca - Senior Tech Writer - 1746 articles published on Notebookcheck since 2017
I first stepped into the wondrous IT&C world when I was around seven years old. I was instantly fascinated by computerized graphics, whether they were from games or 3D applications like 3D Max. I'm also an avid reader of science fiction, an astrophysics aficionado, and a crypto geek. I started writing PC-related articles for Softpedia and a few blogs back in 2006. I joined the Notebookcheck team in the summer of 2017 and am currently a senior tech writer mostly covering processor, GPU, and laptop news.
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2021 10 > Vladimir Putin sees value in cryptocurrencies, but it is too early to consider crypto-backed oil trades
Bogdan Solca, 2021-10-14 (Update: 2021-10-14)