- Cryptocurrencies like Bitcoin, Ethereum, and Tether are reportedly being used in transactions with China and India.
- The global oil market has historically relied on the U.S. dollar, but sanctions have pushed Russia to explore alternative payment options.
Western sanctions have pushed Russia to find alternative payment methods for its oil exports. Now, cryptocurrencies like Bitcoin, Ethereum, and Tether are playing a growing role in transactions with China and India, according to sources familiar with the matter.
While traditional currencies still dominate Russian oil deals, crypto provides a workaround for financial restrictions, allowing for faster transactions and easier conversion between Chinese yuan, Indian rupees, and Russian roubles.
For years, the global oil market has relied on the U.S. dollar as the primary currency for transactions. However, Russia has been forced to seek alternatives following Western sanctions. According to Reuters, Russian oil companies now use crypto to facilitate payments from Chinese and Indian buyers.
The process involves a middleman converting yuan payments into crypto, which is then transferred across multiple accounts before reaching Russia, where it is converted into roubles. The International Energy Agency valued Russia’s oil trade at $192 billion last year. While crypto transactions currently make up a small portion of that, sources say the practice is growing. “It is a convenient tool and helps run operations faster,” one source explained.
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Russia’s Crypto Shift In Oil Trading
Russia is not the first country to turn to crypto to bypass U.S. restrictions. Iran and Venezuela have also used digital currencies to maintain economic activity under sanctions. Venezuela, in particular, has increased its reliance on crypto for crude and fuel exports after Washington reinstated penalties.
A researcher tracking crypto usage in sanctions circumvention noted that Russia has developed multiple payment systems, with Tether’s USDT being just one of them. Despite the use of crypto, Russia also continues to employ other methods, such as transactions in UAE dirhams.
While discussions about potential sanctions relief for Russia are ongoing, the use of crypto in its oil trade is unlikely to fade. Even if traditional banking channels open up again, sources say crypto provides speed and flexibility that could keep it relevant in future transactions.
Meanwhile, authorities are cracking down on crypto platforms suspected of facilitating sanctioned transactions. Russian crypto exchange Garantex, which was sanctioned by the U.S. in 2022 and the EU last month, suspended operations after Tether blocked digital wallets associated with its platform.
