Russia is considering accepting Bitcoin as a payment method for oil and gas exports, according to a high-ranking lawmaker. Pavel Zavalny noted that "neighboring countries could pay bitcoin or in their fiat currency as a payment method. Earlier this week, Vladimir Putin who is the President of Russia stated that he wanted other countries to buy its gas and oil with roubles.
The action is said to be intended to strengthen the Russian ruble, which has lost more than 20% of its value this year. Sanctions imposed by the United Kingdom, the United States, and the European Union in reaction to Ukraine's invasion have put pressure on the rouble and raised the cost of living in Russia. Russia, on the other hand, retains the world's largest gas producer and the world's second-largest oil provider.
Mr. Zavalny, the chairman of Russia's State Duma's energy committee, stated on Thursday that the country is looking into other ways to obtain paid for energy exports. He mentioned China and Turkey as "friendly" countries that were "not participating in the sanctions pressure."
"We have long proposed to China that we transition to payments in currencies for roubles and yuan," Mr. Zavalny added. "It'll be liras and roubles with Turkey."
"You can even exchange bitcoins," Mr. Zavalny continued.
Despite the risks, some believe Russia will profit from embracing the popular cryptocurrency.
"Russia is experiencing the effect of unprecedented sanctions very swiftly," said David Broadstock, a senior research fellow at Singapore's Energy Studies Institute. "There is a need to back up the economy, and Bitcoin is considered as a high growth asset in many aspects."
However, he observed that the value of Bitcoin has fluctuated by up to 30% this year. In contrast, the dollar has fluctuated within 5% of the euro.
"Embracing Bitcoin creates significantly more risk in the transaction of natural gas as compared to other traditional currencies," Mr. Broadstock added.
"Moreover, one of Russia's biggest 'friendly' trading partners in China, and Bitcoin is prohibited in China," he continued. "This certainly restricts the possibility for Bitcoin payment."
Concerns have been raised that Russian oligarchs may be exploiting virtual currency to dodge sanctions.
This has prompted the Ukrainian government, as well as US and European lawmakers, to request that all Russian users be barred from crypto-currency sites.
However, many businesses have ruled this out.
"Now that their currency has crashed, some ordinary Russians are turning to cryptocurrencies as a lifesaver," said Brian Armstrong, CEO of cryptocurrency company Coinbase.
"Many of them are likely to oppose what their country is doing, and a ban would be detrimental to them as well," he added.
Mr. Putin's comments on forcing "unfriendly" countries to pay in roubles sent the currency to a three-week high on Wednesday.