Russia plans to accept Bitcoin as payment for natural gas sales. Developers send Tether using Bitcoin’s Lightning network.
In Short
- Russia is open to accepting payments for gas using Bitcoin.
- It will only supply its natural resources if paid using rubles.
- Digital dollars are sent using Lighting Network.
Russia accepting Bitcoin for oil and gas. In statements today, Pavel Zavalny, Chairman of the Energy Committee of the Russian Congress, said that the Russian government is willing to accept Bitcoin as a means of payment for natural gas sales. Just a day ago, Russian President Vladimir Putin announced that if Europe wanted to continue supplying its natural resources (gas and oil), it would only accept rubles (National currency) as payment.
The strategy to force other countries to trade their operations away from the dollar and euro may give traction to the ruble. The Russian currency fell 50% by the close of the Russian stock market and the beginning of the war with Ukraine.
The announcement presents a series of obstacles for Russia, such as isolation from the SWIFT system. For this reason, it should not come as a surprise this statement by the chairman of the Energy Commission. They evaluate the possibility of using Bitcoin as a form of payment to exchange goods.
This announcement would represent a real dilemma for the governmental and institutional sanctions imposed on Russia by the U.S. Government and NATO, which seek, as expressed by the spokespersons of these countries, to financially isolate the government of Vladimir Putin until the war against Ukraine ceases.
Russia vs. Ukraine: Bitcoin is technology-neutral
Crypto industry insiders often say that Bitcoin “is neither right nor left. It can be used by your best friend and your worst enemy,” This is a product of the neutrality of Bitcoin technology and its decentralized nature. Crypto neutrality derives from the possibility that any person, company, organization, government, or institution can use this asset.
Venezuela was the first country to make governmental use of cryptocurrencies due to economic sanctions (2018). Then, in 2021, with the Bitcoin Law, El Salvador would become the first country to adopt BTC as a legal tender.
More administrations began to adopt crypto. Cities such as Lugano (Switzerland) announced their conversion into a “Bitcoin City.” Some international analysts have started expressing concerns about the first “crypto war.” They are concerned about how Ukraine receives aid in Bitcoin to finance its defense, weapons, food, and clothing, while Russia, now isolated from the international financial system, finds an escape from the economic siege in Bitcoin and other virtual assets.
Digital dollars (USDT) sent using Bitcoin
Using the Lightning network’s benefits, such as speed and reduced transaction cost, Synonym developers sent Tether tokens on the lighting network, a second layer protocol Bitcoin blockchain.
They opened a Lightning channel between two nodes in the Bitcoin network, accepting lighting rules and connected to the Omni protocol. They send small transactions over the Omni network, including the tether token’s metadata.
The CEO of Synonym explained that transacting Tether is only possible if the two Lightning nodes accept the Omni protocol rules. Last year, 70% of bitcoin transactions used Tether as an exchange pair. Many people use Tether in their trades as the counterpart in a crypto pair when transacting on exchanges.