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Russia May Accept Bitcoin for Oil and Gas Purchases

The shift to using digital currency could allow Russia to avoid the impact of financial sanctions following its invasion of Ukraine

On Thursday, one of Russia’s top leaders said the country is considering accepting Bitcoin as payment for its oil and gas exports.

Pavel Zavalny said in his statement that “friendly” countries might be allowed to pay in crypto-currency or their local currencies when acquiring oil and natural gas from the embattled nation.

Earlier this week, Russian President Vladimir Putin said “unfriendly” countries would be required to buy its oil and gas with Russian roubles. The move aims to boost the Russian currency, which has lost over 20% in value this year. International financial sanctions by the U.S., U.K. and the E.U. have weakened Russia’s rouble and economy.

Putin’s comments Wednesday on making “unfriendly” countries pay in roubles pushed the rouble to a three-week high.

Russia remains the world’s largest exporter of natural gas and the second-largest oil supplier.

On Thursday, Zavalny, who heads Russia’s State Duma committee on energy, said that the country has been analyzing alternative methods to receive payment for its energy exports.

He said China and Turkey were among “friendly” countries “not involved in the sanctions pressure.”

“We have been proposing to China for a long time to switch to settlements in national currencies for roubles and yuan,” said Zavalny“You can also trade bitcoins.”

Concerns have been raised that Russia and its oligarchs could be using virtual currencies to avoid sanctions. As a result, the U.S. and European leaders have asked cryptocurrency platforms to ban all Russian users.

Multiple cryptocurrency exchanges have refused to comply and still allow Russians to trade and exchange digital currency.

Brian Armstrong, chief executive of cryptocurrency firm Coinbase, said, “Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed.”

“Many of them likely oppose what their country is doing, and a ban would hurt them, too,” Armstrong continued.

Many existing oil and gas contracts are agreed upon in euros, and it is unclear if Russia can change them. 

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