Russia is moving away from the dollar and the euro as payment options for its energy exports, and bitcoin has been mentioned as a possible substitute alongside the ruble and the national currencies of partnering countries. A high-ranking parliamentarian has indicated that Moscow may take cryptocurrency 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 the unprecedented Western sanctions imposed following its invasion of Ukraine. The energy-rich nation is now turning to other currencies to replace the US dollar and euro in its gas trading.
On Wednesday, President Vladimir Putin announced that Russia will ask “unfriendly” nations to pay with rubles for the natural gas they buy. EU member states, many of which are heavily reliant on Russian gas supplies for heating and power generation, fall in that category.
US and European sanctions are hurting Russia’s economy and fiat currency. Some of the measures target its access to the global financial market and foreign currency reserves. The ruble gained ground after 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 start, it will affect other resources as well. If they want to buy, they either pay in hard currency, for us it’s gold, or in currencies that suit us. , it is the national currency,” the lawmaker said.
Zavalny explained that settlements with friendly countries like China and Turkey can be made using the ruble or their currencies, the yuan and the lira. Serbia will be able to pay in either convertible foreign currency or Russian rubles. He further elaborated:
The set of currencies may vary and this is normal practice. If there are bitcoins, we will exchange bitcoins.
The official added that a number of European countries are now ready to buy Russian fuel with rubles. “To do this, we just need to solve some organizational issues and sign additional agreements. Nothing changes in our obligations under the contracts. If they don’t pay for the gas, there simply won’t be any gas,” the parliamentarian stated.
Russia tried 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 greenback in its currency reserves and trade settlements with other fiat currencies and potentially digital assets like bitcoin. His remarks came shortly after Putin himself said in a CNBC interview that cryptocurrency could be used for oil trade settlements in the future.
