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Crypto A Functional Means Of Payment, Yet Unsuitable for Oil Contracts

Crypto A Functional Means Of Payment, Yet Unsuitable for Oil Contracts


Russian President Vladimir Putin has declared his support for cryptocurrencies, which are being scrutinized by authorities throughout the world due to concerns that they could be used for laundering money and law-breaking.

Crypto “has the right to exist and can be used as a means of payment,” Putin said in an interview with CNBC.

However, Cryptocurrencies, according to Russian President Vladimir Putin, are too volatile to be used to settle oil contracts, but they do deserve attention as a means of payment. He emphasized it was too soon to judge utilizing virtual currencies to trade oil and other commodities, which account for the majority of Russia’s exports.

The Bank of Russia has frequently previously warned that the cryptocurrency market is extremely unpredictable, and crypto-assets are not permitted to be used as a form of payment in Russia. However, Deputy Finance Minister Alexei Moiseev indicated last week that there are no intentions for a general prohibition similar to China’s.

“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,” said Putin. “It has a place to exist and can be used as a means of payment, of course, but trade in oil, say, or other primary materials and energy sources – still, it seems to me, it is a bit early to talk about this,” he added.

Russians engaging in cryptocurrencies, according to the central bank, have the potential of becoming a critical concern. It highlights the lack of openness in the cryptocurrency market, as well as the significant dangers associated owing to unpredictability.

While Russia may try to prohibit crypto purchases, the bank has stated that Russians will still be able to trade the currencies through foreign facilitators.

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.

Image Credits: Alexei Nikolsky via AP



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