Russia Is Set To Start Accepting Bitcoin For Oil And Gas, Says Energy Chief

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Pavel Zavalny, the energy chief of the Russian Federation, has disclosed the possibility of accepting payment in Bitcoin in exchange for oil and gas from its allies like China and Turkey.

According to the oil chief, the countries could start paying for Russian oil in either Russian Ruble, their respective fiat currencies, or even in Bitcoin, instead of using the ISD as the international financial standard currency for transactions.

Russia has been under extreme sanctions from the United States and other NATO member countries for its decision to invade Ukraine on February 24. It has been looking for ways to increase its earnings, which culminated in the latest decision to allow two of its greatest allies to pay for the country’s energy in BTC.

Payment Settlement In View

According to the state-owned news outlet, RBC, the Chairman of the state committee on energy, Zavalny, revealed on Thursday during a press conference that he, on behalf of the government of Russia, has met with representatives from Turkey and China. The discussion was on the proposed change on settlement in transactions between them and Russia.

Zavalny further added that Russia has long discussed with China the possibility of switching transaction settlements to the national currencies of the Yuan and Ruble. The same goes for Turkey, which has the Lira and Ruble.

However, Zavalny noted that the currency denomination might be different as it is the normal practice between countries, and this is where the importance of Bitcoin comes to the fore.

As for those countries that do not share a closer tie with Russia, Zavalny added that they could pay for energy in Rubles or gold. It is not clear whether Russia is looking at the possibility of amending the terms of existing deals with countries that pay in USD or Euros.

Sidestepping International Sanctions

Since the invasion of Ukraine and the subsequent action by the United States and other NATO members, Russia has been exploring ways to mitigate the impact of the embargo placed on its economy.

The sanctions have severely affected Russia, such that the country would not be able to transact with other countries. Several businesses have been barred from directly interacting with Russia, except for oil and gas transactions.

Russia’s most important export is energy. It supplies most of Europe’s energy demand, alongside other countries, and has proved indispensable to Europe, and replacing it would be difficult.

As per Reuters, Russia earned $119 billion in revenue from oil and gas trading last year, more than from any other export. 

The cryptocurrency market is expecting the proposed plan by Russia to kick into effect as the expanded use of the leading digital currency in international transactions.

At the time of writing, Bitcoin is up by 2.5% over the past 24 hours and is currently on the way to approaching a high of 30 days. CoinGecko revealed that Bitcoin currently trades at $43,917.

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