After the Ukraine attack, Russia plans to counter Western sanctions by selling oil and gas in cryptocurrency bitcoin or Russian rubles instead of dollars or European euros.
Over the past two days, Moscow has come out with the slogan “Petro Bitcoin not Petro Dollars” and as a result the value of the world’s most popular cryptocurrency has risen to over $45,000.
Experts said that Putin’s decision will raise the value of the Russian ruble against the dollar and will become an economic bomb for Russia to face sanctions.
According to the Central Bank of Russia, Russia is the third largest cryptocurrency mining country in the world after the United States and Kazakhstan, and Russians trade an estimated $5 billion in cryptocurrency annually.
“Cryptocurrencies” have become one of the important weapons in the Russian-Ukrainian war, as Moscow uses them to mitigate the impact of sanctions and Kyiv’s dependence on them to finance the army and meet necessary needs.
“When it comes to ‘friendly’ countries like China or Turkey, Russia is ready to be more flexible in terms of payment methods,” said Pavel Zavarny, head of the Energy Committee of the Russian State Duma.
“Alternative ways to pay for Russian energy exports in rubles or bitcoins, rather than dollars, are being considered,” he added.
“We have been proposing to China for a long time to move to settlements in national currencies against the ruble and the yuan,” the Russian official added, noting that Turkey would be “lira and ruble.”
Western countries have imposed tough sanctions on Moscow and froze about $300 billion in foreign exchange reserves Russia holds abroad, in a move Russian Foreign Minister Sergei Lavrov called a “theft”.
Moscow’s plan to get out of the sanctions crisis has prompted European Central Bank President Christine Lagarde to express her concerns about using cryptocurrencies as a loophole to avoid sanctions against Russia.
Lagarde said she was “extremely concerned” about the conversion of large amounts of Russian rubles into crypto assets.
In the United States, US President Joe Biden launched a project to issue “digital dollars” and asked several federal agencies to prepare reports on the risks associated with cryptocurrencies and how to address them.
Egyptian economic expert Nour Nada stressed that Putin’s decision “is an economic nuclear bomb that puts Washington and the West in front of difficult choices.”
And about banking expert Ahmed Shaky, he said: “The intention of the Russian state to sell Russian oil in rubles threatens the throne of the dollar.”
He added that “selling gas in rubles will put pressure on the dollar and reduce its value against different currencies,” noting that “Russia has huge reserves of oil and gas that allow it to continue its plan to pressure the West.”