Pavel Zavalny, the Energy Chief for the Russian Federation has indicated the possibility of welcoming Bitcoin as a payment option for its gas and oil from nations with friendly terms like China and Turkey. Following heavy sanction impositions from multiple nations, the world’s largest nation has also it would prefer trade with non-friendly nations in Rubles or gold.
Russia Shifts Payment Options for its Energy Resources
Russia is one of the largest global exporters of oil and natural gas, fulfilling a significant percentage of European energy requirements. The previously discussed NATO ban on business with Russia has already been refuted as unfeasible by multiple nations including Germany.
Nations that had previously imposed sanctions on Russia can now make payments in Ruble and gold. Whether the upcoming changes will nullify the previous USD/Euro-based contracts between Russia and other nations is a thing that remains to be seen. The decision is seen as a master tactic by Putin-led Russia to recover Ruble from its failing valuations and bypass US Dollar supremacy.
Likely Changes in Accepted Denominations include Bitcoin
On the other hand, nations standing on Russia’s side have been given the opportunity to transact in their own national currency as well as Bitcoin. Thus, China can conduct business with Yuan, while Turkey can opt for the Turkish Lira. Russian news channel RBC reports the Chairman of Russia’s State Duma Committee on Energy made the following statement at the press conference held last Thursday:
“We have been proposing to China for a long time to switch to settlements in national currencies of rubles and yuan. With Turkey, it will be lira and rubles. The set of currencies can be different, and this is normal practice. If there are Bitcoins, we will trade Bitcoins.”
Counter-measure for US-led Sanctions and SWIFT ban
Russia has been looking for ways to circumvent global economic sanctions imposed by the US and its allies for invading Ukraine. Banks from Russia have been blacklisted by SWIFT for preventing cross-border payment settlements. Nations like Japan and Singapore also forfeited from conducting business with Russia barring oil and gas trade.
Energy sources like oil and gas are the most important commodity assets of Russia generating $119 billion through export revenues in 2021 alone. Europe along with other nations is heavily dependent on Russian energy sources, and currently, it is impossible to find a substitute. Combining kerosene and coal, the total energy sector represents 53.8% of the total $388.4 billion Russian exports valuation as per Russia Briefing.
Global crypto markets display a strong positive reaction with news of increased usage of BTC for international trade. Bitcoin jumped 2.5% from the previous day, trading at a 30-day high of $43917. Larry Fink, the CEO of $10 trillion asset fund management giants Blackrock, asserts that the ongoing global instability may lead nations toward digital assets as the preferred option for cross-border payment settlement.