Russia is considering accepting bitcoin as payment for oil and gas exports in the face of stiffened sanctions from Western countries over its invasion of Ukraine.
During the time this report was written, bitcoin was trading at 44K, up nearly 4% for the day, on such macro report.
The chair of Russia’s Duma energy committee said in translated remarks that Russia is willing to be more flexible with payment terms for “friendly” countries such as China or Turkey.
What they are saying
The Russian Energy Export Committee is considering various alternatives for paying for Russia’s energy exports, according to its chairman, Pavel Zavalny.
“Since a long time, we have been proposing to China that rubles and yuan be settled in national currencies,” Zavalny said in translated remarks.
Besides traditional currencies, he also mentioned the lira and the ruble with regards to Turkey. Also, Bitcoin can be traded, he said.
President Vladimir Putin’s promise on Wednesday to require “unfriendly” countries to pay in Russian rubles for gas was also reiterated by the energy chair. Despite concerns that Putin’s move might aggravate an already stressed energy market, European gas prices soared following his announcement.
In comments that echoed the president’s warning from the previous day, Zavalny said, “If they want to buy, let them pay either in gold or any other currency we feel comfortable with.”
Nic Carter, the co-founder of Coin Metrics, said that Russia is clearly looking to diversify into other currencies. It had begun divesting all U.S. Treasury bonds since 2014 when it started preparing for this kind of transition.
- The Russians now seem serious about abandoning the dollar. Russia is the world’s number one natural gas exporter, which the world needs.
- It is possible for Russia to convert its energy reserves into hard assets that could be used outside the dollar system.
- The position of Putin on bitcoin has changed. Despite believing bitcoin has value, the Russian leader told the media in 2021 that he wasn’t sure it could replace the U.S. dollar in oil trade settlement.
- Kremlin officials are now considering it as a payment for major exports. Bitcoin’s relative lack of liquidity, however, makes it unclear whether it can handle international trade transactions of that scale.
