Putin Turns to Crypto as Russian Economy Creaks

Russia’s deepening economic strains are pushing the Kremlin toward an increasingly digital — and increasingly controversial — solution: crypto. With sanctions tightening, energy revenues fluctuating, and access to global financial rails restricted, President Vladimir Putin is showing a growing willingness to lean on blockchain-based systems to keep parts of the Russian economy moving.

What’s driving this shift is simple: traditional channels are either blocked or too politically costly to use. Since the invasion of Ukraine, Russia has struggled with cross-border payments, foreign currency shortages, and restricted access to Western banks. Crypto offers something the Kremlin desperately needs — a way to facilitate trade outside the reach of U.S. and EU oversight.

Russian officials have recently accelerated efforts to launch state-controlled stablecoins, expand cross-border crypto settlement pilots, and even woo partners willing to use digital assets for oil and commodity payments. For Russia, this isn’t about embracing decentralization or supporting innovation — it’s about survival.

But the strategy carries risks. Crypto volatility, limited liquidity, and global regulatory scrutiny still pose barriers. Moreover, reliance on digital assets can’t fully replace traditional financial infrastructure, no matter how optimistic Russian policymakers sound.

Still, as the economy feels the pressure — with inflation rising and foreign investment frozen — Moscow’s pivot toward crypto looks less like an experiment and more like a necessity. Whether it works is another question entirely.