As Western sanctions tighten, Putin is considering selling its oil and gas for bitcoin

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Russia is exploring accepting bitcoin as payment for its oil and gas exports in the face of increasing sanctions from Western countries over its invasion of Ukraine.

The chair of Russia's Duma committee on energy stated in translated remarks at a recorded press conference on Thursday that when it comes to "friendly" countries like China or Turkey, Russia is willing to be more flexible with payment alternatives.

The buyer's national fiat currency, as well as bitcoin, are being evaluated as alternate means to pay for Russia's energy exports, according to Chair Pavel Zavalny.

In translated comments, Zavalny stated, "We have been recommending to China for a long time to transition to settlements in national currencies for rubles and yuan." "It'll be lira and rubles with Turkey."

He didn't stop with conventional money.

He added, "You can also trade bitcoins."

Bitcoin has risen about 4% in the last 24 hours to around $44,000. Around the time when news of Zavalny's words first broke, the price of the cryptocurrency skyrocketed.

President Vladimir Putin promised on Wednesday that "unfriendly" countries will have to pay for gas in Russian rubles, which the energy chair backed up. Putin's statement sent European gas prices skyrocketing on fears that the measure will aggravate an already strained energy sector.

"If they want to buy, let them pay in hard currency, which is gold for us, or pay in whatever currency is most convenient for us, which is the national currency," Zavalny said, echoing the president's threat from the day before.

Despite the United States' restriction on Russian oil imports in reaction to Moscow's assault on Ukraine, sources tell CNBC that the European Union is unlikely to follow suit, given its substantial reliance on Russian energy, which is used to heat houses during the winter months.

Nic Carter, co-founder of Coin Metrics, stated, "Russia is obviously wanting to diversify into other currencies." He told CNBC that Russia had been planning for such a shift since 2014, when it began to sell all of its US Treasury bonds.

"However, the country was not entirely prepared for the freezing of foreign FX assets," said Carter, who is also a founding partner of Castle Island Ventures, a cryptocurrency-focused early-stage firm.

Russia now appears to be committed to abandoning the dollar.

"They have something that the rest of the world requires," Carter remarked. "Russia is the world's leading natural gas exporter."

Russia's energy reserves may be converted into tangible assets that could be utilised outside of the dollar system.

Putin's stance on bitcoin has shifted. In 2021, Russian President Vladimir Putin told CNBC's Hadley Gamble that while he believes bitcoin has worth, he isn't persuaded it can replace the US dollar in oil trade settlements. The Kremlin's top brass is now considering it as a payment method for large exports. However, it's uncertain whether bitcoin's relative lack of liquidity could sustain such large-scale international commercial operations.

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