Russia Approves Bitcoin Payments for Oil & Gas

UTC by Ibukun Ogundare · 3 min read
Russia Approves Bitcoin Payments for Oil & Gas
Photo: Depositphotos

Previous to sanctions, Russia’s restrictions on cryptocurrencies were inexorable, contrary to what is proposed now.

The Chairman of the State of Duma Committee on Energy Pavel Zavalny said that Russia will now accept Bitcoin payment for oil. He made the announcement at a press conference on Thursday. However, Russia specified that only China and Turkey could pay for oil with Bitcoin.

The economy of Russia has thrived fervently on oil & gas for centuries. So much so that the country is referred to as an “energy superpower” with the world’s largest natural gas reserves. The oil and gas industry makes up about 40% of its budget revenue. Having faced sanctions from virtually all quarters that supported its economic growth, Russia’s economy has nose-dived. Trades on Russia’s stock market have equally stopped, reducing the ruble by half its value, thereby bleeding against the dollar.

Bitcoin hit $44,118 for the first time since early March. The digital coin has seen an upward movement after the announcement. The cryptocurrency managed to reclaim the mid-area around its current levels and could see further upside in the short term if bulls can sustain momentum.

Russia to Accept Bitcoin as Payment for Oil and Gas

As Russia is enlisted as the eighth-largest oil reserve and the world’s leading natural gas exporter,  there were earlier speculations that Russia would resort to oil and gas amid sanctions. Indeed, wide speculation is now an option for Russia. Russia has lost its investors since it invaded Ukraine. The withdrawal of countries resulted in President Putin’s acceptance of Bitcoin from neutral countries like Turkey and China. Other countries regarded as “unfriendly” due to their exit from economic ties with the Russian Federation must pay for oil with rubles and gold. According to Zavalny’s transcripted speech version:

“If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency. As for friendly countries, China or Turkey, which are not involved in the sanctions pressure… You can also trade bitcoins.”

Investment management company BlackRock CEO Larry Fink noted in an investor letter on Thursday. He posited that the invasion has caused nations to agree on deterring economic and trading ties with Russia. Unified in their steadfast commitment to supporting Ukraine, the West launched an “economic war” against Russia.

Why Bitcoin?

Previous to sanctions, Russia’s restrictions on cryptocurrencies were inexorable, contrary to what is proposed now. Russia planning to accept Bitcoin acceptance for oil may indicate that Putin’s war is nowhere near an end. Until the Western Societies strengthen their policy against Russia, nothing will stop its gas producers from Bitcoin payments. The matter was discussed on the agenda at the meeting between President Biden and European leaders on Thursday in Brussels. The West will dissociate every source of potential growth in Russia. They range from technology, supply chain, and human resource.

The speculation that Russia intends to evade sanctions through cryptocurrencies is still unproven. No one can seize or stop funds that are in BTC and any entity can use it worldwide. Nonetheless, energy transactions involve heavy funds, which is almost impossible to push through Bitcoin’s broad virtual paper trail.

Bitcoin News, Cryptocurrency News, Market News, News
Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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