Crypto Too Unstable To Settle Oil Contracts: Russian President Putin

Russia has been trying for years to decrease its dependence on the U.S. dollar which is generally used for oil contracts hasn't managed to achieve it on a large scale, though some firms use euros.

Russian President Vladimir Putin

New Delhi: During a recent interview, Russian President Vladimir Putin said that cryptocurrency though can be a payment unit it is currently too unstable to settle oil contracts. 

During a CNBC interview - which was published on the Kremlin's website on Thursday - he was asked whether he could see oil contracts being denominated in cryptocurrencies instead of dollars in future.

He was quoted as saying, "It's too early to talk about that for now because cryptocurrency can of course be a payment unit, but it is very unstable. To transfer funds from one place to another, yes, but I think it's still premature to trade, especially to trade energy resources". 

Russia, which has been trying for years to decrease its dependence on the U.S. dollar which is generally used for oil contracts hasn't managed to achieve it on a large scale. However, some firms have shifted to euros. 

Russia has made paying for goods and services through cryptocurrencies illegal 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 trade in oil, say, or other primary materials and energy sources - still, it seems to me, it is a bit early to talk about this," Putin said. 

According to a Reuters report, the central bank has said Russians investing in cryptocurrencies has the potential to become a significant problem. It points to the lack of transparency on crypto markets as well as huge risks involved due to the volatility there. Even if Russian ban investing in crypto, Russians would still be able to buy the currencies via foreign intermediaries, the bank has said.