Facing severe sanctions from Western countries due to its special operation in Ukraine, Russia is now considering accepting bitcoin as payment for its oil and gas exports.
In a videotaped press conference, the chairman of Russia’s Duma energy committee said that when it comes to “friendly” countries like China or Turkey, Russia is willing to be more flexible with payment options.
Pavel Zavalny said the buyer’s national fiat currency – as well as bitcoin – are being considered as alternative payment methods for Russia’s energy exports.
“We have been suggesting to China for a long time to switch to national currency arrangements in rubles and yuan. With Turkey, it will be pounds and rubles.You can also exchange bitcoins”
Pavel Zavalny
Bitcoin has risen close to 4% in the last 24 hours to about $44,000.
His comments come a day after Vladimir Putin threatened that Russia would no longer accept payments in dollars or euros for gas deliveries to the European Union, giving Russian authorities a one-week deadline to implement the new ruble-denominated system.
“I have taken the decision to put in place a set of measures to switch to ruble payments for our gas delivered to hostile countries and to abandon all arrangements with currencies that have been compromised,”
– Vladimir Putin
the Russian President said during a government meeting, explaining that it is a reaction to Russia’s asset freeze in the west.
“If they want to buy, let them pay either in hard currency, and that’s gold for us, or pay as it suits us, that is, in our national currency,” Zavalny said
The US Bans
Although the US has banned imports of Russian oil as part of its response to Moscow’s war in Ukraine, sources told CNBC that the European Union is unlikely to follow suit given its heavy reliance on Russian energy, in part to heat homes during the winter.
“Russia is clearly seeking to diversify into other currencies,” said Nic Carter, co-founder of Coin Metrics. He told CNBC that Russia had been preparing for this kind of transition since 2014, when it began divesting all U.S. Treasury bonds.
“But the country was not fully prepared for a foreign currency asset freeze,” said Carter, who is also a founding partner of Castle Island Ventures, a company focused on cryptocurrencies.
“They have something that people need,” Carter said. “Russia is the No. 1 exporter of natural gas in the world.”
Russia could potentially turn energy reserves into hard assets that could be used outside the dollar system.
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