Putin says cryptocurrency is too unstable to settle oil contracts

Putin says cryptocurrency is too unstable to settle oil contracts

Moscow Reuters - Russian President Vladimir Putin said that crypto currencies were too unstable to settle oil contracts but deserved to have a place as a means of payment.

The Russian leader made the remarks in an interview with CNBC that was broadcast on Thursday morning on Kremlin's site. He was asked if he could use oil contracts as currency instead of dollars for future cash flows.

Russia has tried for years to reduce its dependence on the U.S. dollar, which is widely used to settle oil contracts, but it has not managed to achieve that on a large-scale even though some businesses have traded commodities in Euro.

It is too early to talk about that for now because cryptocurrency can of course be a payment unit, but it is very unstable. Yes, transfer funds from one place to another, but I think it's still premature to trade, especially if you are trying to buy energy.

This year Russia brought crytocurrency regulation and has made it illegal to pay for goods and services through the cryptocurrencies in the country, though it is legal to invest in them.

It has a place to exist and can be used as a means of payment, of course, but it doesn't happen with commerce in oil, say, or other basic materials and energy sources - still, it seems to me, it is a bit early to talk about this, Putin said.

The central bank has said that investing in cryptocurrency would become a significant issue for Russians. It is a sign that there is a lack of transparency in crypto market, as well as huge risks associated due to volatility there.

Although Russia could move to ban crypto purchases, Russians would still be able to buy the currencies through foreign intermediaries, the bank said.