Putin Aide Eyes Cryptocurrencies to Beat Sanctions, Rambler Says

(Bloomberg) -- An adviser to President Vladimir Putin said cryptocurrencies may help Russian banks avoid international sanctions, the Rambler News Service reported Tuesday.

Sanctions against Russia have created an “objective need” for the digital currencies, Sergei Glazyev told a meeting of the presidential administration on the legal status of such instruments, according to Rambler. Glazyev also argued that the government could use cryptocurrencies to make and receive payments around the world for “sensitive” services, it said.

Russian officials have grown increasingly nervous about a possible expansion of U.S. sanctions early next year in retaliation for alleged Kremlin meddling in the 2016 presidential election, which Russia has denied. Virtual currencies such as bitcoin, which has soared in price this year amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.

Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.

Glazyev, who’s himself under U.S. and European Union sanctions for his role in the 2014 annexation of Crimea from Ukraine, isn’t always in the mainstream of Kremlin policy making and has suggested in the past that Russia should liquidate its dollar reserves. He advocated creating a digital ruble based on the blockchain technology behind cryptocurrencies at Tuesday’s meeting, according to Rambler.

©2017 Bloomberg L.P.

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