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Russia is increasingly using cryptocurrencies to facilitate oil trade with China and India as it navigates Western sanctions. While the country has previously endorsed digital currency for international transactions, its role in oil trading is now coming to light. Several sources confirm that crypto is being used as a workaround to convert foreign currencies into Russian roubles, making transactions smoother and faster.
How Crypto is Used in Russian Oil Trade
- Some Russian oil companies have adopted Bitcoin (BTC), Ethereum (ETH), and stablecoins like Tether (USDT) to process payments.
- These digital assets help convert Chinese yuan and Indian rupees into Russian roubles efficiently.
- Although crypto represents only a small portion of Russia’s $192 billion oil trade, its usage is steadily growing.
Crypto as a Sanctions Evasion Tool
- Countries like Iran and Venezuela have previously relied on crypto to bypass U.S. sanctions and maintain economic stability.
- Following renewed sanctions, Venezuela accelerated its use of digital currencies for crude and fuel exports.
- Russia has also developed various alternative payment systems, with crypto being just one of them.
How the Transactions Work
- A Chinese buyer pays a middleman in yuan into an offshore account.
- The middleman converts the funds into cryptocurrency and transfers them to another account.
- The crypto is then sent to a third account in Russia, where it is converted into roubles for use in oil trade.
- Some Russian oil traders reportedly handle crypto transactions worth tens of millions of dollars per month.
Challenges and Regulatory Response
- Traditional currencies like the UAE dirham are still widely used for Russian oil transactions.
- U.S. and European authorities are tightening restrictions, with Russian exchange Garantex recently sanctioned and forced to suspend services.
- The Russian central bank has acknowledged that sanctions have caused payment delays but has not commented on the role of crypto in oil trade.
Future of Crypto in Russian Oil Trade
- One source suggests that even if sanctions are lifted, crypto may remain a preferred tool due to its convenience and speed.
- The Kremlin continues to explore multiple payment solutions, with crypto being just one method of bypassing restrictions.
Conclusion
As geopolitical tensions persist, Russia is leveraging cryptocurrencies to maintain its oil trade. While traditional currencies still dominate transactions, digital assets are becoming an increasingly important tool in overcoming sanctions and ensuring smooth operations. Whether crypto remains a long-term solution or just a temporary workaround remains to be seen.
This article reflects the opinions of the publisher based on available information at the time of writing. It is not intended to provide financial advice, and it does not necessarily represent the views of the news site or its affiliates. Readers are encouraged to conduct further research or consult with a financial advisor before making any investment decisions.
