Russian President Vladimir Putin believes cryptocurrencies have value – but is not convinced that they can replace the US dollar in settling oil deals.
A few months ago, Russian Deputy Prime Minister Alexander Novak suggested that Russia might move away from US dollar-denominated crude oil contracts if the US continued to impose targeted economic sanctions.
When asked if Bitcoin or another cryptocurrency could be used as an alternative to the dollar, Putin said: “It is too early to talk about trading energy resources in cryptocurrency.”
“I think it has value,” he told CNBC at the Russian Energy Week event in Moscow on Wednesday. “But I don’t think it can be used in the oil trade.”
“The cryptocurrency is not backed by anything yet,” Putin said. “It may exist as a means of payment, but I think it is too early to talk about trading oil in cryptocurrencies.”
Putin also cited the massive energy consumption of cryptocurrencies as a potential barrier to their use. Bitcoin requires a lot of computing power to process transactions and make new tokens.
However, Putin did not soften words about Russia’s attempt to move away from dependence on the dollar.
“I think the United States is making a huge mistake in using the dollar as a tool for sanctions,” he said. “We are forced. We have no other choice but to move to transactions in other currencies.”
“In this regard, we can say that the United States bites the hand that feeds it,” Putin added. “This dollar is a competitive advantage. It is a global reserve currency, and the United States uses it today to achieve political goals, and as a result it harms its strategic and economic interests.”
In June, Russia announced that it would give up US dollar assets from its sovereign wealth fund.