Vladimir Putin: The Risks Related to Cryptocurrencies Are Very High (Report)

The President of the Russian Federation – Vladimir Putin – believes bitcoin and the alternative coins bear high risks for investors. However, he predicted that the asset class might play a significant role in the future financial network.

‘The Volatility Is Colossal’

The 69-year-old politician aired his thoughts about the cryptocurrency space during the “Russian Calling” investment forum in Moscow, reported by RBC. According to Putin, private digital assets are highly volatile, which makes them a risky investment instrument:

“It is not backed by anything, the volatility is colossal, so the risks are very high. We also believe that we need to listen to those who talk about those big risks.”

The volatile nature of most cryptocurrencies, including bitcoin, is indeed present. However, the leading digital asset is a relatively new token, and it could overcome its price fluctuations in the upcoming years, especially if authorities impose a comprehensive regulatory framework on it.

Anthony Scaramucci – SkyBridge Capital’s CEO – is a supporter of this thesis. He recently compared BTC to Amazon, reminding that the e-commerce giant was also unstable in its early days but is now one of the most influential companies.

While criticizing cryptocurrencies, though, Putin did not rule out the possibility that they could become part of the future monetary system:

“Although, of course, in some countries, in some economies, cryptocurrencies are being used more and more widely. Maybe this is the future, but we need to closely monitor how this process will develop.”

Not long ago, the southern neighbor of Russia – China – imposed a total ban on cryptocurrency mining and trading. Putin revealed that his country does not intend to go that far. The authorities will follow the developments in the industry and implement “elements of regulation,” which will not harm the nation’s economy:

“As for Russia, we will act on the basis of the realities that are developing in our country. There should be some elements of regulation, but not those that would constrain economic activity.”

Vladimir Putin, Source: Bloomberg

Putin’s Previous Stance

This is not the first time when the Russian President has shared his viewpoint on the cryptocurrency universe. In the middle of October, he noted that bitcoin and other digital assets could one day be used as a unit of account and a means of payment.

Asked whether cryptocurrencies could replace the US dollar when settling oil trades, for example, Putin said it “too early to talk about this:”

“In order to transfer funds from one place to another – yes, but to trade, let alone trade in energy resources, in my opinion, is still premature.”

Featured Image Courtesy of Anadolu Agency