Russia has reportedly turned to cryptocurrencies to facilitate its oil trade with India and China, using digital assets to circumvent Western sanctions.
While fiat currencies like the UAE dirham still dominate the majority of transactions, digital assets are becoming a small but growing component of the country’s energy trade.
Deepening Crypto Adoption
The development was first reported by Reuters, which, citing unidentified sources, stated that Russian oil companies are using Bitcoin (BTC), Ethereum (ETH), and stablecoins like Tether (USDT) to convert Chinese yuan and Indian rupees into rubles.
According to the report, a Chinese buyer can pay for Russian oil in yuan to an offshore trading company. An intermediary then converts the funds into crypto before transferring them through multiple accounts. Finally, the digital assets are exchanged for rubles in Russia, allowing transactions to bypass traditional banking networks.
This method is said to have proven particularly useful in skipping Moscow’s need for U.S. dollars. It also aligns with legislative changes Russia made in 2024, permitting the use of digital currencies in international trade.
Although the Bank of Russia has put in place a strict ban on domestic crypto payments, the government has encouraged their use in cross-border transactions, signaling a pragmatic approach to maintaining economic stability.
Limited Crypto Trading for Select Investors
Recently, the bank proposed a three-year trial allowing select high-networth investors to trade crypto under strict regulatory oversight. Going by reports, the initiative, announced on March 12, is intended to improve market transparency while maintaining control over digital asset activities in the country.
Last year, Finance Minister Anton Siluanov confirmed that Russian businesses are using cryptocurrencies to navigate economic restrictions imposed by the United States and its allies following Moscow’s invasion of Ukraine in February 2022.
The trend isn’t unique to Russia. Other blacklisted nations, such as Venezuela and Iran, have also turned to crypto to keep their economies afloat. However, the oil exporting giant’s adoption of virtual currencies in its energy trade marks a major escalation in its efforts to sidestep the restrictions placed on it.
