Russian President Putin Praises Bitcoin and The Growth of Crypto

Key Points:

• Russian President Putin criticized holding state reserves in foreign currencies due to confiscation risks.
• Putin praised Bitcoin and digital assets as vital for financial reliability, aligning with Russia’s new law recognizing cryptocurrencies as property.

On Wednesday, Russian President Putin criticized foreign currency reserves, highlighting the risks due to political tensions.

Read more: Russian Bitcoin Miners Get a Way Out to Avoid Sanctions

Russian President Putin Criticizes Foreign Reserves

In a speech during an investment conference in Moscow, Putin called into question the logic of keeping reserves in assets which could easily be confiscated. Instead, investing in domestic infrastructure, logistics, science, and education is safer, he added.

Putin’s comments are in the wake of $300 billion in Russian reserves frozen by Western countries since the beginning of the Ukraine war in 2022. The G7 is still considering using these frozen assets to help Ukraine.

Underlining the dangers of weaponizing financial instruments, Russian President Putin accused the US administration of undermining global confidence in the dollar by politicizing its role as the world’s reserve currency.

Russia Leverages Bitcoin to Counter Sanctions

Amidst all these challenges, Putin advocated digital assets such as Bitcoin as important alternatives. “Who can ban Bitcoin?” he declared. Surprisingly, he identified cryptocurrencies as important in cutting costs and increasing financial reliability.

The endorsement is apt for the recent legislative activity in Russia, including acts proclaiming cryptocurrencies to be properties, exempting from value-added tax charges for mining of cryptos and sales in cryptos, and removing tax liabilities for transactions of electronic means of payment systems.

Russia is strategically shifting towards cryptocurrency. During the wartime efforts in Ukraine, it used Bitcoin to counter such sanctions. Recently, the BRICS summit has had member states discuss the possibilities of digital currencies affecting international transfers.