According to Reuters, Russia has turned to cryptocurrencies to facilitate oil trade with China and India, effectively bypassing Western sanctions in its $192 billion oil trade. Sources familiar with the matter revealed this information.
The country has been gradually increasing its involvement in the cryptocurrency space. Recently, the Bank of Russia proposed the creation of an experimental legal regime (ELR) for a limited three-year period, allowing a specific group of Russian investors to engage in cryptocurrency trading.
Some Russian oil companies are using bitcoin, ether, and stablecoins like Tether (USDT) to convert payments received in Chinese yuan and Indian rupees into roubles. While these cryptocurrency transactions currently make up only a small portion of Russia’s oil trade.
Other sanctioned nations, such as Iran and Venezuela, have also turned to crypto to facilitate trade without relying on the U.S. dollar, the predominant currency in global oil markets.
Russia has implemented various payment systems to navigate sanctions, with cryptocurrency being one of the tools used. Although fiat currencies are still the primary method for oil transactions in Russia, the country also explores alternatives like the United Arab Emirates dirham, as reported by Reuters.
The report suggests that even if sanctions were lifted, Russia would likely continue using cryptocurrency in its oil trades due to its convenience and flexibility. Additionally, Russia is working on getting its major banks to support a digital ruble for both retail and commercial purposes.
In 2021, the Bank of Russia mentioned that a ruble-backed central bank digital currency could serve as a tool against sanctions.
