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Although Russia is being heavily punished for starting a war with Ukraine, its leaders are trying to find ways to increase revenues and raise the possibility of allowing China and Turkey to use bitcoin to pay for oil and gas.
Pavel Zavalny, Russia's energy chief, has raised the possibility of accepting Bitcoin as a payment for his oil and gas from "friendly countries" such as China and Turkey.
He added that these countries can pay for energy in Russian rubles, Chinese yuan or Turkish lira or even Bitcoin. Instead of the international standard of using U.S. dollars.
According to russian news agency RBC, during a press conference on March 24, the chairman of the State Duma Committee on Energy Zavalny stated that he and representatives from China and Turkey discussed changes to priority payment currencies for the country's largest export.
"We have long proposed to China to move to settle in the national currency of rubles and yuan. For Turkey, it will be lira and rubles. Although the currency set will be different, the reality is very normal. If there is Bitcoin, we will trade in Bitcoin.
Nic Carter, co-founder of cryptocurrency market data provider Coin Metrics, who said it was clear that Russia was looking to diversify into other currencies.
He added that "unfriendly countries" could pay for their oil in rubles or gold. However, it is unclear whether Russia will be able to change the terms of existing contracts with countries that pay in USD or Euros.
Russia has been trying to circumvent international economic sanctions over its invasion of Ukraine. Russian banks have been removed from the SWIFT system to prevent them from settling cross-border payments and most businesses are prohibited from doing business with Russia, with the exception of the oil and gas business.
Energy is russia's most important export and an important source of energy in Europe and other countries that are difficult to replace. In 2021, oil and gas trade brings in $119 billion in revenue for Russia. Including oil, electricity, coal and natural gas, energy trade accounts for 53.8 percent of Russia's $388.4 billion in total exports by 2021, according to russia briefing.
The cryptocurrency market seems to have reacted positively to the news of an expanded international use case for BTC. According to CoinGecko, Bitcoin has gained 2.5% over the past day and is currently hitting a 30-day high, trading at $43,917.
Blackrock CEO Larry Fink, the world's largest asset manager, may be watching his predictions of a new digital payment system come true before his eyes. Fink wrote in a letter Thursday to shareholders that global political instability could pave the way for countries to adopt digital currencies as international payment instruments.
Although the U.S. has banned oil imports from Russia, it is unlikely that the European Union will do so as the region relies heavily on Russian energy sources.
