Russia’s Energy Chief Says He Would Accept Bitcoin for Oil and Gas

The head of energy of the Russian Federation, Pavel Zavalny has raised the possibility of accepting Bitcoin as payment for his oil and gas from “friendly countries” such as China and Turkey.

He said those countries could start paying for energy in Russian rubles, Chinese yuan, Turkish lira – or even Bitcoin (BTC) – instead of the US dollar, which is the international standard.

According to the Russian media outlet RBC, eState Duma Committee on Energy Chairman Zavalny told a press conference on March 24 that he and representatives of China and Turkey have been discussing changes to the preferred settlement currencies for their biggest export.

“We have been proposing to China for a long time to move to settle in the national currencies of rubles and yuan. With Turkey, it will be lira and rubles. The set of currencies may be different, and it is normal practice. If there are Bitcoins, we will negotiate with Bitcoin”.

Furthermore, he stated that “unfriendly countries” could pay for their oil in rubles or gold. However, it is unclear whether Russia can change the terms of existing contracts with countries that pay in euros or dollars.

Russia has been exploring ways to circumvent international economic sanctions imposed on it for invading Ukraine. Russian banks have been excluded from the SWIFT system to prevent them from settling cross-border payments, and most companies have been banned from doing business with Russia, except for oil and gas trade.

Energy is the most important product that Russia exports, and it is a key source of energy in Europe and other countries that are difficult to replace. According to Reuters, oil and gas trade provided $119 billion in revenue to Russia in 2021.

Including electricity, kerosene, coal and natural gas, energy trade accounted for 53.8% of total Russian exports of $388.4 billion in 2021, according to Russia Briefing.

The cryptocurrency market seems to have reacted positively to the news of the expanding international use of BTC. Bitcoin price is up 2.5% in the last day and is now nearing 30-day highs trading at $43,917 according to CoinGecko.

Blackrock’s CEO, Larry Finck, the world’s largest asset manager, may be seeing his prediction of a new digital payments system materialize before his eyes. Fink wrote in a letter to shareholders on March 24 that global political instability could pave the way for nations to adopt digital currencies as international settlement tools.

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