Vladimir Putin backs Bitcoin: Crypto to challenge dollar dominance?

• Putin’s crypto stance has changed- now considers it as a tool to reduce costs and improve financial security.
• Russia to adopt crypto to avoid sanctions, lessen dollar dependence, and strengthen financial independence.

In a notable shift, Russian President Vladimir Putin has acknowledged the ongoing rise of digital currencies like Bitcoin [BTC], emphasizing their potential to reshape financial systems.

Speaking at the Moscow Investment Forum on 4th December, Putin highlighted the role of digital assets and went from disliking Bitcoin to not banning crypto.

He said,

“Who can ban Bitcoin? Nobody. And, who can prohibit the use of other electronic means of payment? Nobody. Because they are new technologies.”

He further added,

“And no matter what happens to the dollar, these tools will develop one way or the other because everyone will strive to reduce costs and increase reliability.” 

What led to Vladimir Putin’s change in stance?

This stemmed from Putin strongly criticizing the reliance on foreign currency reserves, arguing that such assets are highly susceptible to political manipulation.

Additionally, he also accused the U.S. of politicizing the dollar, pushing countries to explore alternatives like cryptocurrencies for asset protection.

In fact, recently President Putin also signed a law granting digital assets legal recognition as property for foreign trade settlements within an experimental framework.

For context, this legislation exempts activities like crypto mining and sales from value-added tax (VAT), signaling a push for clearer regulatory guidelines to integrate digital currencies into Russia’s economy.

Additionally, the move also reflects Moscow’s strategic efforts to reduce reliance on the U.S. dollar and counter the impact of Western economic sanctions.

Way forward

Thus, by adopting digital currencies, Russia aims to boost financial sovereignty and establish alternative channels for international trade.

That being said, from legalizing crypto mining to leveraging Bitcoin during the Ukraine conflict to counter Western sanctions, Moscow’s proactive measures highlight its strategic shift toward digital assets.

Needless to say, Putin’s advocacy for Bitcoin appears to challenge U.S. initiatives, such as President-elect Donald Trump’s proposed Bitcoin reserve, reflecting a competitive stance in global crypto leadership.