Mar. 25, 2022 | ECONOMY

Russia is Exploring to Accept Bitcoin as Payment for its Oil and Gas Exports

Russia is exploring accepting bitcoin as payment for its oil and gas exports as Western countries tighten sanctions over its invasion of Ukraine.

In a recorded press conference on Thursday, the chair of Russia’s Duma committee on energy stated in translated remarks that Russia is willing to be more flexible with payment methods when dealing with “friendly” countries such as China or Turkey.

Chair Pavel Zavalny stated that the buyer’s national fiat currency, as well as bitcoin, were being evaluated as alternate methods of payment for Russia’s energy exports.

Bitcoin has risen about 4% in the last 24 hours

Bitcoin has risen about 4% in the last 24 hours to around $44,000. The cryptocurrency’s price rose around the time news reports of Zavalny’s statements initially circulated.

The energy chair also reiterated President Vladimir Putin’s Wednesday threat to make “unfriendly” countries to pay for gas in Russian rubles. Putin’s statement sent European gas prices skyrocketing on fears that the measure will aggravate an already stressed energy sector.

Though the United States has blocked Russian oil imports as part of its response to Moscow’s war on Ukraine, sources tell CNBC that the European Union is unlikely to follow suit, given its substantial reliance on Russian energy, particularly to heat homes during the winter months.

Russia appears to be serious about abandoning the dollar

“Russia is clearly looking to diversify into other currencies,” said Nic Carter, co-founder of Coin Metrics. He told CNBC that Russia had been preparing for that kind of transition since 2014, when it started to divest all U.S. Treasury’s.

“However, the country was not entirely prepared for the freezing of foreign FX assets,” said Carter, who is also a founding partner of Castle Island Ventures, an early-stage cryptocurrency startup.

Russia now appears to be serious about abandoning the dollar.

“They have something that the world requires,” Carter stated. “Russia is the world’s leading natural gas exporter.”

Russia may be able to turn its energy reserves into hard assets that can be utilized outside of the dollar system.

Putin’s stance on bitcoin has shifted. In 2021, Russian President Vladimir Putin told CNBC’s Hadley Gamble that, while he believes bitcoin has worth, he is skeptical that it can replace the US dollar in settling oil trades.

Now, top Kremlin officials are considering it as a means of payment for big exports. However, it is uncertain whether bitcoin’s relative lack of liquidity could sustain such large-scale international commercial operations.

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