After a slew of sanctions, Russia is reportedly considering accepting digital currencies to pay for oil and gas. Yesterday, Pavel Zavalny, the head of the Russia Duma Committee, suggested that Bitcoin could be accepted as payment for the nation’s oil and other resource exports. He said that the government would be open to considering a variety of options for paying for its oil and gas from “friendly” countries.
“We’ve been offering China to switch to transacting in national currencies, such as the Ruble and the Renminbi, for a while now,” he said, according to a translated report of his comments. “With Turkey, that would be the Lira and Ruble. Currency sets can be different; it’s a common practice. You can also trade bitcoins.”
Following the news, cryptocurrency markets jumped, with the global crypto market cap reaching over $2 trillion. Bitcoin crossed the $45,000 mark, while Ether stayed strong at $3,100 after many weeks. Popular altcoins like Cardano, Solana rallied today before a sell-off.
Russia has been slapped with a wave of sanctions since it invaded Ukraine. As the conflict has advanced, Russia has had trouble finding buyers for its crude oil, although China and India had been buying it at a cheaper rate. Russia largely relies on natural resource sales to fuel their economy, which is one reason why the country’s economic regime has struggled.
In the midst of this murky situation, crypto as a payment option may seem appealing. However, analysts believe that it may be more difficult than it seems to use crypto as a payment method.
Let’s take China as an example. It’s no secret that China doesn’t like cryptocurrencies, and that’s why it issued a blanket ban in the country. Similar to that, trading in crypto in India is not cheaper due to heavy government taxes. Now even if Russia mulls trading oil with these “friendly nations” using crypto, it won’t be easy for these countries to switch to digital currencies.
With that said, Russia’s interest in using crypto might not make for the greatest optics – but crypto has remained an impartial player in the Ukrainian-Russian conflict, namely in the way that it has helped people escape the economic turbulence of their countries.