We’ll Treat Cryptocurrencies with Caution, Says Russian President Putin

The Russian government will continue to tread the subject of cryptocurrencies with caution, newly re-elected president Vladimir Putin said during his annual Q&A hotline session with the Russian public.

On Thursday’s live “Direct Line” session with president Putin, a citizen asked if Russia will have its own cryptocurrency and, if so, if it would be controlled by the government. Putin was also asked to offer his thoughts on cryptocurrencies’ disruptive potential to replace standard physical fiat cash.

In response, Putin said Russia cannot have a cryptocurrency since they “by definition” aren’t within the control of a state and are “beyond national borders”, he explained. While that explanation may fall short in the context of a central bank digital currency (CBDC), Putin admitted the “phenomenon” of cryptocurrencies is growing globally.
Cryptocurrencies as payment instruments have been adopted in Japan but “it doesn’t work in other countries” Putin said, highlighting the views of Russia’s own central bank on the subject.

Putin said:

“In most countries, cryptocurrency is not a means of settlement. The Central Bank of the Russian Federation believes that cryptocurrencies cannot be a means of payment, settlement or store of value. These currencies are not secured by anything.”

The latest national ‘hotline’ was Putin’s 16th live Q&A session with a Russian public, a four-hour annual televised event with curated questions. Notably, it was the first session wherein the platform saw discussion surrounding cryptocurrencies and the sector’s expected regulations.

Putin even touched on cryptocurrency mining, stating it “is not regulated by us” but “we treat it very carefully”. An energy-intensive process, cryptocurrency mining sees blocks of validated transactions added to the blockchain wherein miners are rewarded with newly minted coins.

Avoiding Sanctions with Cryptocurrencies
As for its potential applications, Putin insisted that Russia should explore the possibility of using cryptocurrencies to “avoid restrictions in global finance and trade”, hinting at the possibility of using blockchain technology to avoid western financial sanctions led by the United States.

The Russian president’s remarks on the subject come within weeks of a Moscow meeting between Iranian and Russian officials discussing the usage of cryptocurrency for international trade.