Pavel Zavalny, Russia’s chairman of the Energy Committee of the State Duma — the lower house of the Federal Assembly of Russia, has stated that the country would be open to selling energy for Rubles, gold, national currencies of friendly countries, or even Bitcoin. After naming “friendly” nations like China, Turkey, and Serbia and Russia’s willingness to trade with them for their own currencies, Zavalny said, “The set of currencies can be different. It’s standard practice.” Zavalny also expressed support for President Vladimir Putin’s decision to impose energy payments in Russian rubles to unfriendly countries.
According to Zavalny, Russia is ready to accept anything other than “candy wrapper” fiat currencies like EUR or USD. Zavalny’s comments arrived at a press conference with the Russian government news outlet Russia Today, where he tried to explain how Russia would move away from selling its natural gas for US Dollars and Euros when global energy markets are overwhelmingly denominated in the two.
“We’ve been offering China to switch to transacting in national currencies, such as the ruble and the renminbi, for a while now. With Turkey, that would be the lira and ruble. Currency sets can be different; it’s a common practice. If it would be necessary to trade with Bitcoin, we’d do it,” Zavalny stated.
The lawmaker also expressed support for President Vladimir Putin’s decision to impose energy payments in Russian rubles to unfriendly countries. “If we can’t store [the euro], acquire it, if the ability to settle in this currency with our counterparties, including those in Western Europe, is violated, then why should we trade for this currency?” Zavalny asked rhetorically. “We have lost all interest in euros and [US] dollars,” he commented.
The move is a reaction to the tightening sanctions on Russia and its financial system, which have isolated the country’s banks as well as its wealthiest citizens from much of the rest of the world.
It is also worth noting that Europe is heavily dependent on Russian natural gas for energy, leaving those markets open to trade despite pressure from the US to move away from them. While demanding Europe find rubles to pay for Russian gas is likely to harm those imports, it is part of a dwindling arsenal of countermeasures at Russia’s disposal.