With the war still raging in Ukraine, the international community has placed heavy sanctions on Russia and the gap between the west and Moscow is growing each day the violence is continued. It was last night when news spread all over the media that Russia might opt for Bitcoin to be able to sell oil and gas, which is both vital to the country’s economy.
What to make of this news and could this potentially be a game-changer for Bitcoin and the market?
Russia is locked out from its bank account
With the exclusion from SWIFT, Russia is basically unable to settle international trade in US-Dollars. At the same time, the accounts of the central bank have been frozen. This reduces the ability for international trade. Russia can still export oil and gas but it needs desperately to find an alternative to settle transactions.
One option would be to pay all energy exports in Rubel, which was recently demanded by President Putin. Another option would be to settle trade in Yuan, which is reportedly explored by the Indian government.
In any case, Russia has only two options to establish trade with the rest of the world. Either stop the aggression in Ukraine and negotiate or find an alternative to the US-Dollar and the international payment system that is attached to it.
Zavalny is talking Bitcoin
It was last night when a videotape went viral with the chair of the Russia Duma committee Pavel Zavalny. He suggested that Russia is open to exploring alternatives when trading with other nations that have close ties to Russia.
Among them are China and Turkey. All of a sudden, it seems that Bitcoin is a payment option between those countries as Zalavny suggested among other possible solutions. The truth is that China, as well as Turkey, have made it clear that they are against Bitcoin in the last couple of years. Regulation in Turkey allows trading activities but effectively bans crypto as a medium of exchange. China has already released its own CBDC and has no interest in losing control over the currency that is used by its citizens.
Interestingly enough, Russia is also caught between two positions. While the central bank was routing to restrict crypto even more just a few months ago, it was President Putin who opened up the market but made it crystal clear that crypto needs strict regulation.
Put these details into one picture and it becomes clear that it is highly unlikely that Bitcoin becomes important for trade between Russia and other countries.
But what if it happens?
Contrary to the popular belief that this would be super bearish for BTC, this case would be one of the most bullish moments in Bitcoin’s history. While it is true that western countries would like to prevent Russia from undermining sanctions, they could easily control the crypto market by enforcing the travel rule onto every crypto-related business or service. A ban would not be needed and like the most recent regulatory approaches in the EU are showing, crypto is becoming a part of the world that is here to stay.
With western regulators busy establishing a set of rules that make cryptos a user-friendly part of everyday life, a ban is off the table.
What we all can do is take a deep breath, close our eyes and imagine the charts when the news breaks that Bitcoin is used to settle international trade for oil and gas. Do you remember what happened after Elon broke the news that Tesla bought a small bag?
You don’t need to FOMO. Remember, it is highly unlikely.