Russia may have to accept crypto payments for oil and gas

Russia may have to accept Bitcoin as payment for its oil and gas exports amid tough new sanctions.

Russia could turn to “friendly” countries to pay in the crypto-currency or in their local currencies.

Russian President Vladimir Putin says he wants “unfriendly” countries to buy its gas with roubles. 

That plan would see Russia boost its economy, which has lost over 20% in value so far this year.

Ruble is rubble

Sanctions imposed on Russia by western governments following the invasion of Ukraine have raised the cost of living inside the country and cut the value of the ruble.

Russia is still the world’s biggest exporter of natural gas and the second largest supplier of oil.

Analysts say Russia might not have any choice but to start accepting crypto as payment for oil and gas.

“Russia is very quickly feeling the impact of unprecedented sanctions,” said David Broadstock, a senior research fellow at the Energy Studies Institute in Singapore.

“There is a need to shore up the economy and in many ways, Bitcoin is seen as a high growth asset.”

Bitcoin’s rocky year

The value of Bitcoin has swung by as much as 30% this year.

“Clearly accepting Bitcoin, compared with other traditional currencies, introduces considerably more risk in the trade of natural gas,” Mr Broadstock said. 

“Moreover, one of the major ‘friendly’ trade partners for Russia is China, and cryptocurrency is banned for use in China,” he added. “This clearly limits potential for payment using Bitcoin.”

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Evading sanctions

But the continued operation of cryptocurrency exchanges in Russia, such as Binance, Yobit and Local Bitcoins, has been worrying US officials for some time. 

They’re concerned that crypto is helping Russia to evade sanctions.

Bitcoin is not the only cryptocurrency Russians could buy, but it is by far the most traded and trusted of all cryptocurrency offerings, so is a useful proxy for the market.