Key Takeaways
- Russia is using Bitcoin and Tether for oil trade with China and India.
- Transactions can reach tens of millions of dollars per month.
- Despite sanctions, Russia sees Bitcoin as a useful payment tool.
Russia is increasingly relying on Bitcoin and other digital assets in its oil trade to bypass Western sanctions, according to four sources with direct knowledge of the matter.
While traditional currencies still dominate transactions, cryptocurrencies are playing a small but growing role in Russia’s $192 billion oil trade.
Use of cryptocurrencies in transactions
Russian oil companies have been using Bitcoin, Ether, and Tether to convert Chinese yuan and Indian rupees into Russian roubles.
One oil trader’s monthly transactions with China reportedly reach tens of millions of dollars.
Transaction process
A typical transaction involves a Chinese buyer paying an intermediary in yuan, who then converts the funds into cryptocurrency before transferring it to accounts in Russia, where it is exchanged for roubles.
Impact of sanctions
The Russian central bank has previously acknowledged that sanctions have slowed payments, making alternative methods necessary.
Future of Bitcoin in oil trading
Even if sanctions are lifted, sources suggest Russia will likely continue using Bitcoin for oil trading due to its speed and efficiency.
Other workarounds include the use of the UAE dirham.
Sanctions on crypto exchange
The U.S. has imposed sanctions on Russian crypto exchange Garantex, which suspended services last week after Tether blocked its wallets.
However, experts say digital assets remain a key tool for Russia’s international transactions.
