Per a report from RBC, Russia will accept Bitcoin to trade their energy resource. Pavel Zavalny, Chairman of the State Duma Committee on Energy, announced today that the country will let “ally” countries pay for their oil with their local currencies or in cryptocurrency.
Related Reading | FinCEN Warns Russia Not To Use Cryptocurrency To Evade Sanctions
The announcement comes on the heels of a series of international sanctions that have effectively limited Russia’s access to the global financial system. The international community imposed penalties on this country for its invasion of Ukraine.
The Russian Federation, led by President Vladimir Putin, has been looking for alternatives to keep their economy afloat as their national currency plummets. Bitcoin could be an effective alternative for its censorship resistance capacities.
Funds held in BTC cannot be stopped or seized, like the International Community did with Russia’s gold reserves, and can be used by any entity around the globe. Zavalny said:
We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan. With Turkey, it will be lira and rubles. The set of currencies can be different, and this is normal practice. If there are bitcoins, we will trade bitcoins.
The Ukrainian-Russia conflict has prolonged for a month, and according to reports, it has become a costly endeavor for the Putin-led forces. Russia’s capacity to sustain the offensive has come into question, but the war could extend if Putin finds economic relief.
As RBC added, countries considered “unfriendly” by the Russian Federation will need to pay for oil with rubles and gold.
Can Bitcoin Help Russia Evade Sanctions?
Crypto regulation in Russia has been ambiguous with some government officials asking for a full ban on trading and mining activities. However, Putin and Zavalny support the use of digital assets and with the recent announcement, the country could move for faster legalization of this sector.
Bitcoin detractors have been arguing that cryptocurrencies could be used for Russia and sanction individuals to avoid international penalties. However, as CoinCenter’s Neeraj Agrawal reported, authorities from the U.S. have ruled out this possibility.
Agrawal has shown the opposite side of this coin, where rather than BTC and cryptocurrencies helping the attacker, they are being used in Ukraine to transfer wealth.
"She originally got into cryptocurrency when her Ukrainian bank wouldn’t let her move out an appreciable amount of money, and the fees that PayPal charged were higher than she wanted to pay. “With crypto, it was much easier,” https://t.co/DoxdtkudlD
— Neeraj K. Agrawal (@NeerajKA) March 23, 2022
Bitcoin seems to be reacting to the upside to this announcement. The cryptocurrency managed to reclaim the mid-area around its current levels and could see further upside in the short term if bulls can sustain momentum.
As of press time, Bitcoin trades at $43,900 with a 4.3% profit in the last 24-hour.