Russian President Vladimir Putin Questions Dollar for Forex, Says Bitcoin Inevitable

After advocating for digital assets at the BRICS summit held in Kazan this year, Russian President Vladimir Putin has once again recognised Bitcoin for its decentralisation and independence from the traditional financial system.

Speaking at a Moscow forum on Wednesday, Putin’s remarks started with the growing importance of alternative payment systems in response to the dominance of the US dollar, particularly in the context of Russia’s strained relations with Western nations, which we all know what is going on there.

A legitimate question: why accumulate reserves if they can be lost so easily?For example, Bitcoin, who can prohibit it? No one.

‘Russian President Vladimir Putin

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Putin: Blockchain And Crypto a Cost-Efficient, Reliable Tool

Putin described cryptocurrencies and blockchain ecosystems as cost-efficient and reliable tools that can pave the way for the next generation of finance. Russia is becoming more open to digital assets, and it makes sense given that it’s one of the most sanctioned countries on planet Earth. It’s no wonder Russians are seeking alternatives to the constraints of conventional financial systems.

Additionally, Putin pointed out the country’s efforts to create a clear regulatory framework for cryptocurrency use among Russian citizens and companies, aligning with the government’s broader financial strategy. 

Keep in mind Western sanctions froze approximately US$300B (AU$466B) of Russia’s foreign reserves in 2022, a response to the conflict in Ukraine, which drove Moscow to reconsider its reliance on foreign currencies for state reserves… It was kind of late already for that.

Recently, the Russian government implemented a new crypto tax regulation law. On November 27, Russia’s Federation Council, the upper house of parliament, approved a federal bill introducing taxes on cryptocurrency transactions, a new step into legalising and promoting the use of crypto within the country. 

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The legislation classifies digital currencies as property, subjecting cryptocurrency sales to a 13% to 15% personal income tax. It also provides an exemption from value-added tax (VAT) for mined cryptocurrencies, offering some relief for Russian crypto miners.