The Petro-bitcoin? Russia says “friendly” countries can buy oil and gas with crypto
Russia is looking to bypass sanctions and continue selling its oil and natural gas for bitcoin with countries like China and Turkey, according to a news conference televised on Thursday.
Russia's energy minister Pavel Zavalny said Western countries seeking Russian energy will have to pay in ruble and gold, while "friendly" countries who are not involved in the sanctions pressure can use their own currencies or even bitcoin.
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"We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan," Zavalny said. "With Turkey, it will be lira and rubles."
"You can also trade bitcoins," he explained.
A long-considered plan
The U.S. as well as the European Union, United Kingdom, Germany, Canada, Australia, and Japan have all imposed sanctions on Russia in an attempt to thwart any future attacks in Ukraine. In February, however, reports surfaced that the warring nation may be using cryptocurrencies to bypass these measures.
"Russia has had a lot of time to think about this specific consequence,” Michael Parker, the head of the anti-money-laundering and sanctions practice at the Washington law firm Ferrari & Associates, said at the time to The New York Times. “It would be naive to think that they haven’t gamed out exactly this scenario.”
Basically, Russia was planning on making deals around the world, using digital currencies to bypass the control points that governments rely on, with anyone sketchy enough to ignore the country's recent actions and continue profiting from them. It seems now that the reports are turning out to be true.
Western companies to pay in gold
What does this mean for Western nations and those imposing sanctions?
"If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency," Zavalny added.
The move is bound to send energy prices soaring making an already difficult energy landscape even more severe. European gas prices already rose by 30% on Wednesday, when the ruble increased to a three-week high past 95 against the dollar.
However, friendly nation China has declared all crypto-related transactions as illegal which means Russia's new offer might not be so appealing to the country. Turkey, on the other hand, may very well partake in Russia's new offer.
Oil and natural gas are Russia's single most important sources of energy so the nation is bound to get creative about selling the resources.
There has been a lot of talk about China and a new Sputnik moment for America, but such talk ignores why the original Sputnik moment was so traumatizing.