Yesterday, during an interview with CNBC, Russian President Vladimir Putin explicitly stated that cryptocurrencies “have a right to exist”.
Putin on cryptocurrencies
The interview was done by American host Headley Gamble, at the end of the plenary session of the Russian Energy Week forum.
Gamble asked Putin if he thought that in the near future we will see contracts for the supply of oil not in dollars, but in other currencies, perhaps even in cryptocurrencies.
“Cryptocurrency contracts? It’s too early to talk about that for now because cryptocurrency can of course be a payment unit, but it is very unstable. To transfer funds from one place to another, yes, but I think it’s still premature to trade, especially to trade energy resources: in my opinion, it is still too early. Cryptocurrencies are not supported by anything yet. They exist and can be used as a means of calculation, sure, but trading oil or other raw materials and energy sources… it seems to me still too early to talk about that. But all things develop, all things have a right to exist. We will see how it goes in the future: perhaps one day they might even be a means of accumulation. We are seeing this market fluctuate. It’s a bit early today.
Beyond the obvious objections to the use of cryptocurrencies as a medium of exchange for the international sale of oil, gas, and other commodities, Putin said four very interesting things.
Let’s not forget that Russia’s official attitude towards cryptocurrencies has always been very sceptical, and that Putin had no ulterior motive in responding to Gamble about cryptocurrencies in this way.
He first admitted that cryptocurrencies can be units of account, although their volatility still makes them inconvenient to use as a means of payment.
Cryptocurrencies for transferring Russian funds
This statement was not at all expected in Russia until now, when made by an authority. Rather, the Russian authorities, primarily the Central Bank, have always claimed that cryptocurrencies had no value.
Secondly, Putin admitted that cryptocurrencies can be used to transfer funds from one place to another, as is happening with remittances to El Salvador, for example. This statement inevitably implies that they could also be used, for example, for payments between different states with different currencies.
The third important thing is that he stated in no uncertain terms that he believes cryptocurrencies have a right to exist. Russian law has never been able to stop their use, and in the end he probably just acknowledged the factual situation.
The fourth thing is probably the most curious, namely that cryptocurrencies in the future could be a means of accumulation. This statement clearly refers specifically to Bitcoin as a risk-on hedge against inflation. By specifying that he considers this to be a future possibility, he seems to have denied the hypothesis that Russia may have already bought BTC as a form of risk-on hedge against inflation, although on the other hand his words sound like an admission that they might do so in the future.