Russia is moving away from the dollar and euro as payment options for its energy exports, and Bitcoin has been mentioned as a possible replacement alongside the ruble and national currencies of partner countries. A high-ranking lawmaker has indicated that Moscow may accept cryptocurrencies for natural gas and other resources.
Russian official mentions Bitcoin among alternative settlement methods for his gas
The Russian Federation has taken action in response to unprecedented Western sanctions imposed by the invasion of Ukraine. The energy-rich nation is now looking for other currencies to replace the US dollar and euro in its gas trade.
On Wednesday, President Vladimir Putin announced that Russia will ask “enemy” nations to pay in rubles for the natural gas they buy. EU member states, many of which rely heavily on Russian gas supplies for heating and power generation, fall into this category.
US and European sanctions are hurting Russia’s economy and fiat currency. Some of the measures target access to the global financial market and foreign exchange reserves. The ruble gained some lost ground after Putin’s announcement, as gasoline prices in Europe soared.
“If we can’t store a coin, acquire it, pay with it, why should we exchange it?” Pavel Zavalny, head of the Energy Committee of the State Duma, the lower house of parliament, commented to Russian media on Thursday.
“Gas is just the beginning, it will affect other resources as well. If they want to buy what they pay for either in hard currency, for us that is gold, or in currencies that suit us, which is the national currency”, said the legislator.
Zavalny explained that agreements with friendly countries like China and Turkey can be made with the ruble or its currencies, the yuan and the lira. Serbia may pay in convertible foreign currency or Russian rubles. He further explained:
The set of currencies may vary and this is normal practice. If there are bitcoins, we will exchange bitcoins.
The official added that several European countries are now ready to buy Russian fuel with rubles. “For that, we just need to solve some organizational problems and sign additional agreements. Nothing changes in our obligations under the contracts. If they don’t pay for gas, there will simply be no gas,” said the parliamentarian.
Russia has been trying to reduce its dependence on the dollar even before the military crisis in Ukraine. In October, Deputy Foreign Minister Alexander Pankin told Interfax that Moscow could partially replace the dollar in its foreign exchange reserves and negotiate deals with other fiat currencies and potentially digital assets such as bitcoin. His comments came shortly after Putin himself said in an interview with CNBC that the cryptocurrency could be used for future oil trade deals.