Vladimir Putin says bitcoin could be a useful asset as Russia’s reserves remain frozen
Russian President Vladimir Putin is engaging in a war of attrition in Ukraine, despite the heavy economic cost.
Russian President Vladimir Putin cast doubt over Moscow’s need to hold foreign currency reserves, suggesting that bitcoin could offer a better alternative.
“A legitimate question: why accumulate reserves if they can be lost so easily?” Putin said at an investing conference organized by VTB, according to Reuters.
Wednesday’s remarks nod to the Kremlin’s strife with Western governments since the start of the Ukraine war in 2022, which prompted the US and its allies to freeze around $300 billion worth of Russia’s foreign reserves.
Despite Moscow’s protests, the Group of Seven countries are debating strategies on how to use the funds to support Kyiv. In October, the UK made Ukraine a $3 billion loan using profits from the frozen assets.
Putin said the confiscation of its reserves is detrimental to the US dollar’s reputation and standing as the foremost central bank reserve asset, and said that countries have already turned to cryptocurrencies as an alternative.
“For example, bitcoin. Who can prohibit it? No one,” Putin added.
Apart from bitcoin, he touted future electronic payment systems as another option. In October, Putin called for the BRICS bloc of developing economies to create an alternative payment system, given Moscow’s exclusion from the US-dollar-dominated SWIFT financial messaging system.
As Western sanctions have piled economic hardship on Russia, the Kremlin has increasingly come to embrace digital assets, marking a change from its previous anti-crypto stance.
Russia, which proposed a blanket crypto ban in 2022, now permits digital currency payments, and is seeking to introduce a digital ruble next summer. Last week, the Moscow Times reported that Putin signed a law creating a legal tax framework for crypto miners and transactions.
The outlet said Russia expects to earn $2 billion worth of rubles a year from miners.
