Putin recognizes the potential of crypto as a trade currency (provided oil is not involved)
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Russian President Vladimir Putin conceded in an interview Wednesday that cryptocurrency “has value” as trade currency, but not when that trade involves oil.
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His comments grabbed the headlines in part because Russian officials hinted that the country could move away from crude contracts involving US dollars if the US continues to impose economic sanctions.
Asked by CNBC’s Hadley Gamble at Russian Energy Week in Moscow if bitcoin or another crypto could be used in place of the US dollar, Putin said it was “too early to talk about trading in energy resources in crypto “.
“I believe it has value,” he added. “But I don’t believe it can be used in the oil trade.”
Putin went on to say that cryptocurrency “is not supported by anything yet. It may exist as a means of payment, but I think it’s too early to talk about trading oil in cryptocurrency. .
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Russia is heavily dependent on the oil industry as a consumer and producer. According to the US Energy Information Administration, it was the world’s third largest oil producer last year with 10.5 million barrels and an 11% share of the world total. Only the United States and Saudi Arabia rank better.
But just because Russia is not yet ready to pull the trigger on crypto as an oil currency, the country has not changed its position on the dollar.
“I think the United States is making a huge mistake in using the dollar as an instrument of sanction,” Putin said. “We are forced. We have no choice but to switch to transactions in other currencies. In this regard, it can be said that the United States is biting the hand that feeds it. This dollar is a competitive advantage. It is a universal reserve currency, and the United States today uses it to pursue political goals, which is detrimental to their strategic and economic interests. “
In June, Russia announced that it would remove U.S. dollar assets from its sovereign wealth fund. As GOBankingRates recently reported, the country that uses crypto the most is Nigeria, where 32% of respondents said they used or owned one type of crypto or another in 2020. Russia was not in the top 10 first.
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Here is the top 10, based on data from Statista:
- Nigeria: 32%
- Vietnam: 21%
- Philippines: 20%
- Turkey: 16%
- Peru: 16%
- Switzerland: 11%
- India: 9%
- China: 7%
- United States: 6%
- Germany: 5%
In terms of the overall use of crypto, Russia still lags behind much of the rest of the world.
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Last updated: October 14, 2021