Russian Federation chief Pavel Zavalny proposed Bitcoin as payment for energy exports


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