Russia may use Bitcoin to settle oil and gas exports, says lawmaker

Russia is reportedly mulling the idea of accepting Bitcoin or other cryptocurrencies as payment for its oil and gas sold to “friendly countries,” said a high-ranking lawmaker.

BBC cited the head of energy committee, Pavel Zavalny, as saying China and Turkey could begin paying for energy in Russian roubles, Chinese yuan, Turkish lira — or even Bitcoin. The move comes as the United States and its Western allies have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine last month.

Zavalny added that he and representatives from the two countries had already discussed new settlement currencies rather than the international standard US dollar. As for “unfriendly countries,” the crypto option is not available for them, and they could pay for their energy exports in the Russian currency or gold.

European gas prices have already soared this week after President Vladimir Putin floated the idea of forcing “unfriendly” countries to pay for gas in roubles. The news triggered concerns that the move would exacerbate the region’s energy crunch.

Cryptocurrency transactions in rubles hit record volumes in March, raising questions about whether the bitcoin can help Moscow get around sanctions. European nations and the United States have sought to cripple Russia’s banking sector and currency with a barrage of sanctions. This included cutting certain Russian banks from the SWIFT system, which limited Russia’s ability to trade with most of the world .

Russia not ready yet to settle oil trade in Bitcoin

Before Russia’s invasion of Ukraine, Putin said that cryptocurrencies have a “potential future” as a means of payment. The Russian leader pointed out that crypto money finds more real-world use cases. However, Putin was less sure about the fundamentals that were driving the valuations of cryptocurrencies like Bitcoin.

To insulate the Russian economy from Western sanctions, the Kremlin has been trying to reduce the dependence on the US dollar in the country’s foreign trade. Despite being a long-term priority, Putin said Russia will be forced to rely on the greenback for some time, adding that he’s not convinced that Bitcoin can replace the buck in settling oil trades.

“It’s too early to talk about that for now because cryptocurrency can of course be a payment unit, but it is very unstable. To transfer funds from one place to another, yes, but I think it’s still premature to trade, especially to trade energy resources. It has a place to exist and can be used as a means of payment, of course, but trade in oil, say, or other primary materials and energy sources – still, it seems to me, it is a bit early to talk about this,” Putin said.