Russia considers accepting Bitcoin for oil and gas

Pavel Zavalny believes that ‘friendly’ countries might be allowed to pay in crypto-currency, or their local currencies.

Russian President Vladimir Putin stated earlier this week that he wants ‘unfriendly’ countries buy its gas using roubles.

It is believed that the move was made to boost Russia’s currency, which has suffered a loss of over 20% this year.

After the invasion of Ukraine, sanctions imposed by the UK and the US on Russia have put pressure on its rouble and raised its living costs .

Russia remains the largest exporter of natural gases and second-largest supplier of oil in the world.

Russian State Duma chairman on energy, Mr Zavalny, stated that Russia has been looking at alternative payment methods for exports of energy.

He stated that Turkey and China were both ‘friendly’ nations but were not subject to the sanctions pressure.

Mr Zavalny stated that ‘we have been proposing China for a while to switch to settlements for roubles or yuan in national currencies’. It will be liras and roubles with Turkey.

Mr Zavalny said that you can also trade Bitcoins.

‘More risk’

Analysts believe Russia could benefit from the acceptance of the popular cryptocurrency, despite its risks.

David Broadstock, senior research fellow at Singapore’s Energy Studies Institute, said that Russia is already feeling the effects of the unprecedented sanctions. “There is a need for economic stability and Bitcoin is considered a high-growth asset in many ways.

He noted, however, that Bitcoin’s value has increased by up to 30% in the past year. Comparatively, the dollar traded within 5% of the euro.

Broadstock stated that Bitcoin accepts significantly more risk than traditional currencies when it comes to natural gas trade.

He added that China is a major trade partner for Russia and that cryptocurrency is prohibited for use in China. “This clearly restricts the potential for Bitcoin payment.

It is possible that Russian oligarchs might be using virtual currencies in order to circumvent sanctions.

This has prompted both the Ukrainian government and US politicians to ask crypto-currency platform to ban all Russian users.

“Some ordinary Russians are turning to crypto as a way of saving their currency,” said Brian Armstrong, Chief Executive Officer at cryptocurrency firm Coinbase.

He stated that many of them would oppose the country’s actions and that a ban would be detrimental to them.

The currency hit a three-week high after Mr Putin’s remarks about making “unfriendly” countries pay in rubles.

Many gas contracts that are in place are settled in euros, and Russia cannot change them. 40% of the EU’s gas comes from Russia.

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