Russia has begun to abandon the euro and dollar as its payment option for energy exports. Bitcoin was mentioned alongside the ruble as well as the currencies of its partnered countries as possible alternatives. According to a high-ranking politician, Moscow could use cryptocurrency for natural gas or other resources.
Russian Official Names Bitcoin among the Other Settlement Methods It Uses To Pay Gas
As a response to Western sanctions that were imposed on the Russian Federation for their invasion of Ukraine, they have taken steps. In order to trade gas, the energy-rich nation will look to alternative currencies.
On Wednesday, President Vladimir Putin announced that Russia will ask “unfriendly” nations to pay with rubles for the natural gas they buy. This category includes many EU member countries, who are dependent on Russian gas supply for their power generation.
U.S. and European sanctions are hurting Russia’s economy and fiat currency. Some sanctions target its access to global financial markets and foreign currency reserves. The ruble gained some lost ground following Putin’s announcement, while gas prices in Europe soared.
“If we can’t store a currency, acquire it, pay with it, then why should we trade in it?” Pavel Zavalny, head of the Energy Committee at the State Duma, the lower house of parliament, commented for Russian media on Thursday.
“Gas is just the beginning, this will also affect other resources. If they want to buy, let them pay either in hard currency, for us that’s gold, or in currencies that are convenient for us, that’s the national currency,” the lawmaker said.
Zavalny said that payments to friendly countries, such as China and Turkey, can be made in the ruble. Serbia will have the option to pay either in Russian rubles and convertible foreign currency. He went on to say:
The set of currencies may vary and that’s normal practice. If there are bitcoins — we will trade in bitcoins.
According to the official, a few European countries have already expressed their willingness to purchase Russian oil with rubles. “To do this, we just need to solve some organizational issues and sign additional agreements. Our obligations to each other under these contracts do not change. If they don’t pay for the gas, there simply won’t be any gas,” the parliamentarian stated.
Russia had been working to lessen its dollar dependence since before the conflict in Ukraine. Interfax was told by Alexander Pankin, the Deputy Foreign Minister of Russia that Moscow could partially replace dollars in currency reserves. He also suggested that trade settlements would be made with fiat currencies or digital assets such as bitcoin. He made these remarks shortly after Putin said that crypto can be used for future oil trade settlements.
What do you think Russia will do with cryptocurrency? Please leave your comments below.
Credits for the imageShutterstock. Pixabay. Wiki Commons