Russia is using cryptocurrencies to facilitate a small but growing part of its oil trade with China and India to skirt Western sanctions, Reuters reported on Friday, citing four sources with direct knowledge who declined to be identified due to the sensitivity of the matter.
Russian oil companies are using bitcoin and ether via intermediaries to smooth the conversion of yuan and rupees to rubles in its oil trade with the countries, the sources said. The companies are also reportedly leveraging stablecoins like USDT — though, as a centralized entity, issuer Tether can freeze funds to comply with regulatory actions, including sanctions evasion. One of the sources familiar with a Russian oil trader’s operations said its crypto sales to China are worth tens of millions of dollars per month.
Russian companies began using bitcoin and other cryptocurrencies in December following legislative changes allowing their use for international payments to counter Western sanctions, the country’s Finance Minister Anton Siluanov said at the time. Sanctions following the invasion of Ukraine have disrupted Russia’s trade with key partners like China and India, as local banks exercise extreme caution with Russia-linked transactions to avoid Western regulatory scrutiny.
In September, blockchain analytics provider Chainalysis also reported Russia’s central bank was spearheading crypto infrastructure efforts to evade Western sanctions. However, it’s the first time the use of cryptocurrencies in Russia’s $192 billion annual oil trade industry has been reported.
Earlier this month, senior Russian official Anton Gorelkin stated that sanctions won’t fully prevent Russians from using the cryptocurrency market, noting that cryptocurrencies will continue to be one of the most effective tools for circumventing them. Gorelkin’s comments came following fresh EU sanctions on the Russian crypto exchange Garantex, which has already been under U.S. sanctions since 2022.
Meanwhile, U.S. President Donald Trump has signaled interest in improving relations with Russia while pushing for an end to the war in Ukraine, but whether or not sanctions will be lifted remains uncertain. Regardless, crypto is likely to continue being used in Russia’s oil trade, the sources said, as it is more convenient and helps operations run faster.
However, one of the sources, a Kremlin adviser, said cryptocurrencies are just one of several ways to bypass payment issues. Russia is not the only country turning to cryptocurrencies, which have helped other sanctioned nations like Iran sustain their economies while bypassing the U.S. dollar. Russia’s move also follows Venezuela’s increasing use of digital currency for oil exports after the U.S. reimposed sanctions on the country last year.
