Facing stiff sanctions from Western nations, Russia is considering accepting Bitcoin for its oil and gas export transactions.
During a press conference held on March 24, the Chairman of the Energy Committee of the State Duma (Parliament) of Russia, Pavel Zavalny said that when it comes to "friendly" countries like China or Turkey, Russia are willing to offer more flexible payment options. He added that the country's fiat currency, as well as Bitcoin, is being considered as a payment method for Russian energy exports.

"We have been proposing to China for a long time to switch to payment methods other than fiat currencies like rubles and yuan. For Turkey, it's lira and rubles," said Mr. Zavalny. “Countries can also trade with Bitcoin,” he added.

Over the past 24 hours, the Bitcoin price has increased by nearly 4% to around $44,000. The coin's price spiked around the time the media reported on Mr. Zavalny's remarks.

The Chairman of the Energy Committee of the Russian Parliament also confirmed once again the announcement of President Vladimir Putin that asked "unfriendly" countries to buy gas with the Russian ruble. This new announcement by Putin has sent gas prices in Europe skyrocketing due to concerns that the move could make energy markets more tense, which is already under pressure.

“If they want to buy, they have to pay in hard currency and this is gold for us, or pay in some form that is convenient for us and that is fiat currency,” said Mr. Zavalny.

Although the United States has introduced a ban on Russian oil imports to protest Putin's military campaign in Ukraine, sources told CNBC that the European Union (EU) is unlikely to make the same move. This is because these countries rely heavily on Russian energy, in part to run heating equipment in the winter.

“It is clear that Russia is looking to diversify into other currencies,” said Nic Carter, co-founder of Coin Metrics. He told CNBC that Russia has been preparing for this type of conversion since 2014 when it started selling US Treasuries.

"However, the country is still not fully prepared for a foreign exchange asset freeze," Carter said.

Currently, Russia is showing that it is very serious about decoupling from the dollar.

"They have what the world needs," Carter said. "Russia is the number one natural gas exporter globally."

According to CNBC, Russia can convert stored energy into tangible assets that can be used outside of the dollar system. President Putin has changed his mind on Bitcoin.

In 2021, the Russian leader told CNBC that this currency can replace the USD in settling oil transactions. Now, he is considering Bitcoin as a form of payment for large export transactions.

However, it remains unclear whether Bitcoin's illiquid status can support international commercial transactions.
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