According to a senior lawmaker, Russia is considering accepting bitcoin as payment for its oil and gas exports.
Pavel Zavalny says “friendly” countries could be allowed to pay in cryptocurrency or in their local currency.
Earlier this week, Russian President Vladimir Putin said he wanted “unfriendly” countries to buy their gas in rubles.
The move is said to be aimed at strengthening the Russian currency, which has depreciated over 20% this year.
Sanctions imposed by Britain, the US and the European Union after invading Ukraine have weighed on the Russian ruble and pushed up its cost of living.
However, Russia remains the world’s largest exporter of natural gas and the second largest supplier of oil.
Mr Zavalny, chairman of Russia’s State Duma Committee on Energy, said Thursday that the country was exploring alternative ways to receive payments for energy exports.
He said China and Turkey are among “friendly” countries that are “not involved in sanctions pressure.”
“We have long proposed that China switch to national currency settlements for rubles and yuan,” Mr Zavalny said. “In the case of Turkey, it will be lira and rubles.”
Mr. Zavalny added: “You can also trade bitcoins.”
Analysts said that despite the risks, Russia could benefit from the acceptance of the popular cryptocurrency.
“Russia is very quickly feeling the effects of unprecedented sanctions,” said David Broadstock, senior research fellow at Singapore’s Energy Studies Institute. “There is a need to support the economy and Bitcoin is seen as a high growth asset in many ways.”
However, he noted that Bitcoin’s value has increased by as much as 30% this year. In comparison, the dollar has traded within 5% against the euro.
“The unequivocal acceptance of bitcoin compared to other traditional currencies poses significantly more risks in natural gas trading,” said Mr. Broadstock.
“Furthermore, China is one of Russia’s main ‘friendly’ trading partners and the use of cryptocurrencies in China is banned,” he added. “This significantly limits the payment potential with Bitcoin.”
- Are cryptocurrencies a lifeline for Afghans?
- Millions of bitcoin donations flow to Ukraine
There are concerns that Russian oligarchs could use virtual currencies to avoid sanctions.
This has prompted the Ukrainian government, as well as US and European politicians, to urge cryptocurrency platforms to ban all Russian users.
But many companies have ruled this out.
“Some ordinary Russians are using crypto as a lifeline after their currency collapsed,” said Brian Armstrong, chief executive of cryptocurrency firm Coinbase.
He said: “Many of them are probably against what their country is doing and a ban would hurt them too.”
On Wednesday, Putin’s comments about making “unfriendly” countries pay in rubles pushed the currency to a three-week high.
However, many existing gas contracts are in euros and it is unclear whether Russia can change them. The EU depends on Russia for 40% of its gas.
Add Comment