"We have no other choice but to move to transactions in other currencies," Putin said.
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  • Vladimir Putin has recognised cryptocurrencies' value as a means of payment.
  • However, the Russian president said it was too early to evaluate crypto's utility in the oil trade.
  • The energy consumed by bitcoin mining is another potential hurdle for its use, he suggested.
  • For more stories go to www.BusinessInsider.co.za.

Russian President Vladimir Putin said cryptocurrencies may hold some value, but it's too early to tell if they can be used in the oil trade.

"I believe that it has value," he told CNBC at the Russian Energy Week event in Moscow on Wednesday, when asked whether bitcoin or cryptocurrencies can be used in place of the US dollar. "But I don't believe it can be used in the oil trade."

Russia has been considering replacing the dollar in crude-oil payments in response to challenges from Joe Biden's administration and economic sanctions imposed by the US. But it may be premature to consider cryptocurrencies as a replacement, according to Putin.

"Cryptocurrency is not supported by anything as of yet," he said. "It may exist as a means of payment, but I think it's too early to say about the oil trade in cryptocurrency."

Putin separately predicted Wednesday that oil could hit $100 (around R1,474) a barrel, from the current range of around $80 (around R1,179), as global demand skyrockets in a tightening market.

He also indicated that the negative environmental impact from bitcoin mining, which is said to take up roughly 0.5% of energy consumption worldwide, is another obstacle the digital asset faces for widespread use.

But he maintained that Russia is still keen to ditch dollar-denominated payments.

"I believe the US makes a huge mistake in using the dollar as a sanction instrument," he said. "We are forced. We have no other choice but to move to transactions in other currencies."

"In this regard, we can say the United States bites the hand that feeds it," the world leader added. "This dollar is a competitive advantage. It is a universal reserve currency, and the United States today uses it to pursue political goals, and they harm their strategic and economic interests as a result."

Russia said in June that it would abandon US dollar assets from its sovereign wealth fund as it was at risk of more sanctions.

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