Russia is increasingly relying on cryptocurrency to facilitate oil trade with China and India, circumventing Western sanctions, according to four sources with direct knowledge of the matter.
While Moscow has openly supported digital currencies and enacted legislation last year permitting their use in international transactions, their application in the country’s oil trade had not been previously disclosed.
All sources, speaking on condition of anonymity due to the sensitivity of the issue, confirmed that cryptocurrency is playing a growing role in Russia’s energy exports.
A Sanctions Loophole
Countries facing U.S. sanctions, such as Iran and Venezuela, have previously turned to digital currencies to sustain their economies while avoiding the U.S. dollar, the dominant currency in the global oil market. Russia now appears to be following suit.
The shift follows Washington’s recent tightening of restrictions on Venezuela’s oil exports, prompting Caracas to accelerate its use of cryptocurrency. A fifth source, a researcher at an investigations firm tracking crypto-based sanctions evasion, said, “Russia has set up a variety of systems, and USDT (Tether) is just one of them.”
The Bank of Russia has not publicly commented on the matter but acknowledged last year that delayed payments due to sanctions posed a significant challenge to the country’s economy.
Trump’s Russia Stance and Future Prospects
U.S. President Donald Trump has expressed interest in improving ties with Moscow while pushing for a resolution to the Ukraine conflict. However, the future of sanctions remains uncertain. While reports indicate the White House is considering easing restrictions, Trump’s post on March 7 suggested he is also contemplating additional measures against Russia.
One of the sources stated that even if sanctions were lifted, cryptocurrency would likely remain a key component of Russian oil trading, calling it a “convenient tool that helps run operations faster.”
How the Crypto Transactions Work
In one method described by two sources, a Chinese buyer deposits yuan into an offshore account controlled by an intermediary trading company. The middleman then converts the funds into cryptocurrency, transferring them to another account before final conversion into Russian roubles.
For one Russian oil trader selling to China, crypto transactions reportedly amount to tens of millions of dollars per month, according to a source familiar with the operations.
Despite the increasing use of digital currencies, traditional payment methods still account for the majority of Russia’s oil transactions. Analysts note that Russia also utilizes other mechanisms, such as settling payments in UAE dirhams.
Meanwhile, Russian crypto exchange Garantex has faced mounting pressure. The platform was sanctioned by the U.S. in 2022 and more recently by the European Union.
As Russia navigates economic restrictions, its reliance on digital assets in the energy sector underscores the evolving nature of global trade and financial sanctions.
