The economy in Russia isn’t doing too well. Not long ago, the ruble – the national currency of Russia – experienced a massive drop that saw many people turning to crypto as a means of keeping their wealth stable and steady during this ongoing time of economic strife. In addition, it was suggested that crypto was likely going to be a tool in Russia for avoiding U.S. sanctions.
Russia Seeks to Trade Oil for Crypto
Thus, it looks like digital assets have become prime examples of money in Russia, and today’s news is no exception. It has been announced that ever since its invasion of Ukraine, Russia cannot seem to get other countries to purchase its oil. To make ends meet, the nation is looking to sell its oil for BTC if other nations do not wish to pay cash.
As it stands, the global oil market is still very much dominated by the U.S. dollar. Pavel Zavalny – the chair of the State Duma’s committee on energy – was the first to explain the idea of Russia selling its oil for BTC this week. He commented during a conference:
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. You can also trade bitcoins.
The most interesting thing about this whole situation is how much Russia has turned to crypto and how much it needs it. The fact is that not long ago, the nation was looking to ban cryptocurrency and was potentially on the verge of taking a page from the China playbook, though now it looks like the tables have turned and digital assets are being looked at through a much friendlier lens.
Zavalny also stated that Russia is predominantly looking to sell its oil to “friendly” countries such as India and China. Clearly, the nation doesn’t know what China has done over the past year. Traders and investors everywhere were shocked last summer when the region – which once housed roughly 65 to 75 percent of the globe’s crypto and bitcoin mining projects – decided that all crypto mining was illegal, and the industry was going to be shuttered for good within the country’s borders.
Sadly, the damage didn’t quite end there. The nation followed this move by making all crypto activity illegal, meaning traders could no longer engage in digital transactions. Anyone who did would likely face fines and jail time. Given how anti-crypto China has become, why is Russia so convinced it would be willing to buy its oil with bitcoin?
China Will Probably Play Hardball
David Broadstock – senior research fellow at the Energy Studies Institute in Singapore – explained:
Clearly, accepting bitcoin, compared with other traditional currencies, introduces considerably more risk in the trade of natural gas. Moreover, one of the major ‘friendly’ trade partners for Russia is China, and cryptocurrency is banned for use in China.