On Thursday at a press conference, Russian Federation deputy and Energy Committee chief Pavel Zavalny proposed Bitcoin and national currencies as a payment option for energy exports to “friendly countries” such as Turkey and China. Also added that “unfriendly” countries have to pay with rubles for the natural gas they buy.

Chairman Pavel Zavalny stated that these international locations have to start paying for gas in Russian rubles, Chinese yuan, Turkish lira, or even Bitcoin (BTC) instead of the worldwide standard, the United States (U.S.) dollar. A high-ranking parliamentarian has indicated that Moscow can also accept cryptocurrency for natural gas and other resources.

Putin's announcement resulted in some ruble losses, while gas prices in Europe jumped. Energy is the single most vital commodity that Russia exports and is a key energy source in Europe and different countries.

Russian Federation is shifting away and looking to different currencies to substitute the U.S. dollar and the euro as payment choices for its gas trade exports. Bitcoin has been referred to as a feasible replacement alongside the ruble and the national currencies of partnering countries. U.S. and European sanctions are hurting Russia’s economic system and fiat currency. Some of the measures are focused on its access to the world economic market and overseas foreign money reserves. Russia has been taking steps in response to unheard-of Western sanctions imposed over its invasion of Ukraine. He in addition mentioned that “unfriendly countries” should pay for their oil in rubles or gold. Under the unfriendly” countries list, EU member states, many of which are heavily reliant on Russian gas supplies for heating and energy generation, fall in that category.

According to Reuters, the oil and gas trade provided $119 billion in income for Russia in 2021. Including electricity, kerosene, coal, and natural gas, the energy trade accounted for 53.8% of Russia’s whole $388.4 billion in 2021 exports, in accordance with Russia Briefing.

According to Russian information media RBC, Chairman of the State Duma Committee on Energy Zavalny mentioned at a Thursday press conference that he and representatives from China and Turkey have been discussing modifications to preferred agreement currencies for its largest export. Although not clear whether Russia can alternate the terms of current contracts with nations that pay in euros or USD. Russian banks have been eliminated from the SWIFT system to stop them from settling cross-border payments, and most organizations have been prohibited from dealing with Russia, except for oil and gas trading.

Indrani Bose

CBW - External Analyst

INDIA