Up until now, the Russian authorities had shown a skeptical view on using Bitcoin and cryptocurrencies for investments. Authorities from the country have expressed a general fear of its volatility and lack of transparency being an amicable medium for possible money laundering.
The question arises now whether Bitcoin and digital currencies could be considered to settle contracts for oil and electricity while the Russian government steps away from the dollars and finds new ways to trade these commodities in different currencies.
During a recent interview with CNBC published on the Kremlin’s website, Putin approached the subject explaining it is too soon to think of such a measure, seeing that Bitcoin and cryptocurrencies investments are risky and premature, but he also draws a path for future possibilities.
However, he shed light on Bitcoin and cryptocurrencies expressing that they have value, and gave his opinion on their future development saying that “everything evolves, everything has a right to exist. We will see how it turns out,”.
These clarifications, along with similar claims from the deputy Finance Minister, Alexei Moisees, takes Russia further away from a total ban of digital coins. Moisees’ declarations, posted on the Interfax’s website, showed no interest in following China’s steps.
Many countries, such as The United States, are reconsidering their views on cryptocurrency and the hopes grow for new regulations. While China’s ban had put considerable weight on the market, new policies from other countries could continue to open new possibilities.
Why Russia Changed Its Heart On Bitcoin
The numbers are making it harder to deny the digital currency’s gain. While the head of the State Duma Committee, Aksakov, shared the opinion of cryptocurrencies being unstable, he also accepted the profit opportunities it offers during an interview published on Interfax.
Putin also pointed out the increase in the United State’s inflation, considering the biggest economy of the world seems to be endangered. As the dollar’s grounds shake, digital currencies win territory.
He also claimed that the United State’s authorities use their currency as a means to control, thus creating a backlash for them as other countries fear landing on the bad side of their measures.
The Russian law on digital financial assets that went into effect the past January has not been the most tolerant nor the harshest. As the digital currencies continue to evolve alongside Russia’s economic needs and interests, their restrictions might be reconsidered.
Although using Bitcoin and cryptocurrencies is illegal to pay for goods and services, civilians are allowed to invest in them. In other words, the Russian government does not conceive of using digital coins as a currency, but it is possible to trade them for rubles.
Bitcoin and crypto’s effect on the economy has become undeniable. As said law describes cryptocurrencies as “a digital code or designation that may be used by owners as a payment facility.”, and Putin’s affirmations state their right to exist, the future might bring new policies that open investment possibilities while protecting investors.
The crypto market cap is close to its all-time high with a $2.4 trillion valuation, at press time.
Crypto Total Market Cap close to all-time high. Source: Tradingview