Russian President, Vladimir Putin believes that it’s “still premature” to use cryptocurrencies for settling trades of energy resources like oil.
Putin’s comments comes months after Russia’s Deputy Prime Minister, Alexander Novak, suggested that the country could move away from greenback-denominated crude contracts if the US continues to impose targeted economic sanctions.
“Cryptocurrency oil contracts? It’s too early to talk about it. It works for transferring funds from one place to another, but in terms of trading, especially when it comes to energy resources, it is still premature in my opinion,” the president stated in an interview with CNBC that was posted on the Kremlin’s website Thursday.
Putin went on to say that “everything evolves” and “has the right to exist,” adding that the Russian government is closely monitoring the cryptocurrency market.
He also did not exclude the possibility that at some point, cryptocurrencies will become a “means of accumulation.” “We see how his market fluctuates. It’s a bit early today,” Putin added.
The Russian leader however flagged cryptocurrencies’ massive consumption of energy as a potential barrier to their use. Bitcoin requires lots of computing power to process transactions and mint new tokens.
It is worthwhile to note that Russia has sought alternatives to trading in dollars since being slapped with sanctions in 2014 following the annexation of Crimea, and Putin accuses the U.S. of using its currency as a weapon. Crypto backers argue decentralized money will eventually replace fiat currencies issued by central banks.
Putin’s tolerance of cryptocurrency comes as the White House considers launching a broad initiative to review and coordinate crypto policy across President Joe Biden’s administration that could lead to new regulations. China this year has cracked down on the industry and in September banned all crypto transactions.