Russian President Vladimir only wants to accept rubles for Russian natural gas in the future. With this instruction, he caused great confusion in the markets, but also among consumers and European energy companies.
According to the Kremlin, all countries classified as “hostile states” are affected by the order. These include those countries that have imposed sanctions on Russian companies and individuals.
So far, according to the Swiss investment house vontobel about 60 percent of gas deliveries from Russia are processed in euros and the remaining 40 percent in US dollars.
The Kremlin’s move can certainly be seen as an attempt to prop up the country’s currency, which has been falling for weeks. If future gas deliveries were made in rubles, demand would increase and the ruble would appreciate again. The Russian government apparently hopes this will restore the population’s confidence in the country’s currency.
Bitcoin as a means of payment
A little later, a second report circulated that allied states could also make Bitcoin payments to Russia. The bitcoin price then reacted by rising above $44,000. Pavel Zavalny, Chairman of the Energy Committee of the State Duma of the Russian Federation, explained:
We have long been proposing that China settle rubles and yuan in local currencies. With Turkey, it will be lira and rubles. The currencies can be different, this is a common practice. You can also exchange Bitcoins
Pavel Zavalny, Source: BBC
Zawalny expressly supports the special treatment of allied states. He rhetorically asks why Russia should do business in euros if they can’t even buy or store that currency.
So could Bitcoin really be used in the future as a settlement method for oil and gas deliveries between Russia and friendly countries? It is possible, but it is questionable that the liquidity in the market is high enough for transactions of this magnitude. However, if individual states decided to do so, this would certainly push the course higher.
Furthermore, it is questionable whether Russia’s largest trading partner, China, would participate in Bitcoin-denominated deals. After all, China launched massive crackdown on crypto last year. The Chinese central bank had declared all transactions related to Bitcoin and Co. illegal and issued a nationwide Bitcoin mining ban.
Is a crypto ban imminent?
However, the increasing adoption of Bitcoin as a payment method by Russia and its partners would reinforce the image of Bitcoin as a “rogue currency”. In this case, one could expect more anti-Bitcoin campaigns in the western states. Critics see their assumptions confirmed that the key cryptocurrency is a bad thing and better banned. The consequences for the young global crypto industry would be devastating.
Therefore, it is to be hoped that the image of “evil Bitcoin”, which Russia only uses to circumvent sanctions, will not take root in politics and the media. On the other hand, Bitcoin advocates can cite the many positive examples proving Bitcoin’s positive influence in Ukraine to argue otherwise, reported BTC-ECHO.
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