After Ukraine legalized cryptocurrency in the country, Russia is also considering going the same route, by considering BTC payments for its energy exports.
After Ukraine, Russia Considers BTC Payment
Along with BTC payments, officials are also considering opening up payments in national currencies for their energy exports to friendly countries like Turkey and China. The proposal was presented by Russian State Duma Deputy and Energy Committee Chairman Pavel Zavalny at a press conference on Thursday.
Earlier this month, Ukrainian President Zelenskyy had already signed the Virtual Assets Bill, which marked the legalization of crypto in Ukraine.
“Friendly Countries” To Pay In BTC
Earlier, President Vladimir Putin had demanded that “unfriendly countries should have to pay for transactions using rubles. However, the EU turned down the idea. Building off of the proposal, Zavalny called for more flexible payment options for friendly countries, including Bitcoin.
Zavalny’s translated comments stated,
“We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan. With Turkey, it will be lira and rubles…You can also trade bitcoins.”
Gas Prices Soar With Sanctions
The US has already banned imports of Russian oil as a part of its strict sanctions imposed on the country for invading Ukraine. However, the European countries depend heavily on Russian energy, especially for heat energy during the harsh winters. Therefore, it is unlikely that the EU will be following the US in banning Russian energy.
Putin’s earlier comments had sent gas prices soaring in an already aggravated energy market. Since the invasion, crude oil prices have shot up over 18%, and natural gas prices have jumped 22.5% in just a month. Zavalny reiterated the president’s warning by stating that Russia would accept payments at its own convenience, i.e., in the national currency of rubles. He said,
“If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency.”
Putin Changes BTC Stance
The move to crypto from the USD represents a change of tune by the Russian government. In 2021, Putin had compared Bitcoin and USD, claiming that although the crypto held value, it was not sufficient to replace the USD for oil trade payments. In fact, Russia’s central bank had even called for a ban on cryptocurrencies shortly before the invasion of Ukraine. However, the heavy sanctions imposed seem to have soured the mood in Moscow and have encouraged the country to explore other payment options to support its international trade transactions. The central bank has even granted Sberbank, the country’s largest bank, the license to trade digital assets. However, BTC’s relative lack of liquidity could still pose challenges for such large-scale transactions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.