Blockchain

Putin says crypto currencies too unstable to be used for oil contracts

Russian President Vladimir Putin stated that although crypto currencies are too unstable to be used for oil contracts settlements, they still deserve a place in payment.

In an interview with CNBC, the Russian leader made these remarks. The interview was posted on the Kremlin’s website on Thursday. When asked if he would like to see future oil contracts denominated instead in dollars, he replied that he could.

Russia has been trying for years to reduce its dependence on the U.S. Dollar, which is widely used in oil contracts settlements. However, it hasn’t managed that on a large scale despite some firms switching to commodities trading in euros.

“It is too early to discuss that right now, because cryptocurrency can be a payment unit but it is extremely unstable. Putin stated that it is possible to transfer funds between places, but it is still premature to trade, particularly to trade energy resources.

Russia introduced crytocurrency regulations this year. It has made it illegal in Russia to pay for goods or services in cryptocurrency, but it is legal to invest.

Putin stated that “it has a place and can be used to pay, of course, but oil trade, say, or other primary material and energy sources – still, it seems to us, it is a bit too early to talk about it.”

According to the central bank, Russians could become a serious problem if they invest in cryptocurrency. This reflects the lack of transparency in crypto markets and the huge risks associated with volatility.

According to the bank, although Russia could ban crypto purchases altogether, Russians will still be able buy foreign currencies through intermediaries.