Russia Could Accept Bitcoin for Gas Sales Amid Sanctions

In a press conference on Thursday, chairman of the Russian Congressional energy committee, Pavel Zavalny, said the country will accept bitcoins for its natural resources exports. For its exports, including natural gas, Zavalny said that Russia is open to accepting different currencies, depending on the buyer’s preferred payment method. Despite that, the chairman said that terms would be determined by the country’s foreign relations with Russia.

Unfriendly Countries to Pay for Gas in Rubles

“When it comes to our ‘friendly’ countries, like China or Turkey, which don’t pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan,” Zavalny said during the press conference. “With Turkey, it can be lira and rubles. So there can be a variety of currencies, and that’s a standard practice. If they want bitcoin, we will trade in bitcoin.” Days ago, Russia asked other countries to pay for their natural gas in rubles. The move was aimed at boosting the value of the Russian currency, which has been declining against the dollar and the euro. It also caused natural gas prices in Europe to spike where Russia has supplied about 45% of imports. According to Marcel Salikhov of the Institute for Energy and Finance in Moscow, the move is meant to be a counter-sanction. In his remarks, he noted that the Kremlin had already ordered exporters to convert 80% of their foreign-currency proceeds into rubles.

“It’s difficult, given the current economic situation, for Russian authorities to abandon sales of oil and gas to the Western countries,” Salikhov said. “You can say, ‘We do not trust euros or dollars,’ but economically it’s the same operation. Money is money.”

US President Joe Biden banned the import of Russian natural gas to the US, giving a 45-day window to complete contracts. However, European countries have stated plans to reduce dependence on Russian energy but for now, they are still making oil and gas purchases. Energy Minister Alexander Novak warned of a probable “collapse” in energy markets in an address to the Russian Duma on Wednesday, predicting that prices would spike if Russian shipments paused.

Exchanges are Split on Offering Russian Transactions

As western politicians seek to keep Russia out of the global financial system, cryptocurrency exchanges are coming under pressure to block transactions with Russia. They fear that cryptocurrencies provide a backdoor to move money around the world. Most major cryptocurrency exchanges have agreed to comply with the restrictions imposed by the US and other Western countries. However, some have pushed back against banning all transactions in Russia. One of the exchanges, which is based in the Cayman Islands, said it would not be able to implement a blanket ban on all Russian users. However, US-based cryptocurrency exchanges such as Coinbase and Gemini have confirmed that they do not operate in Russia. However, they noted that they would not implement a blanket ban on their operations. Many cryptocurrency exchanges are based in offshore jurisdictions or are uncontrolled aside from their duty to comply with anti-money laundering regulations.

Russia is Ranking in Bitcoin Transactions

Investors can convert their roubles into cryptocurrency, which can subsequently be exchanged on unregulated platforms. According to statistics from Chainalysis, a crypto research organization, trading between the Russian rouble and crypto assets such as bitcoin and tether has more than quadrupled since the attack on Ukraine began, hitting $60 million each day on Monday. This means that Russian accounts, which are forbidden from the existing dollar-based banking system due to sanctions, are storing cash in cryptocurrency or shifting wealth abroad. According to a Chainalysis report, Russia is among the top 20 nations in the world in terms of bitcoin usage. Even before the war, Russia ranked third among nations that transferred the most crypto transactions overseas, after only Turkey and Ukraine.