Russian President Vladimir Putin maintains that cryptos can be used as a “means of payment”

  • Following China's crackdown on cryptocurrencies, the United States is considering new crypto regulations. 
  • While cryptocurrencies are under regulatory scrutiny in most countries, the Russian President has signaled tolerance of crypto. 
  • The President cautioned against the use of cryptocurrencies for trading oil and other commodities that make up a high percentage of Russia's exports. 

Cryptocurrencies are under scrutiny by financial watchdogs and regulators worldwide. China's crypto ban shifted Bitcoin mining and hashrate to the United States, which now accounts for a third of all BTC being mined. 

Vladimir Putin accepts the role of cryptocurrencies in payments

Russian President Vladimir Putin commented on the use of cryptocurrencies in a recent interview. In contrast, cryptos are drawing scrutiny for their illicit use in laundering money and criminal activities. 

Putin said cryptocurrency "has the right to exist and can be used as a means of payment" and signaled a tolerance of digital assets. The Russian President cautioned that it was too soon to talk about using crypto as a currency for its exports of oil and other commodities. 

Russia has looked for alternate currencies to the USD since sanctions hit the country in 2014. Proponents argue that decentralized money (cryptocurrencies) will replace centrally issued fiat currencies.

Traders and early adopters consider crypto a secure and effective means of payment; however institutions like the International Monetary Fund (IMF) caution against its use. 

The IMF recently stated,

Tougher regulation is needed to prevent the rapid growth in cryptocurrencies leading to financial instability, defrauding of consumers and the funding of terrorism.

The Bank of Russia has warned investors against using cryptocurrencies for domestic payments, citing it as a highly volatile form of currency. The country has no plans to ban cryptocurrencies, unlike Beijing. 

Jon Cunliffe, deputy governor of financial stability at the Bank of England, was recently quoted:

Financial stability risks currently are relatively limited, but they could grow very rapidly if, as I expect, this area continues to develop and expand at pace. How large those risks could grow will depend in no small part on the nature and on the speed of the response by regulatory and supervisory authorities.

Bank of England, therefore, considers the matter of crypto regulation an urgent one. The monetary authority of England is working on issuing a digital pound, and a joint task force of two UK regulators is deployed to the project. 

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