Russia Is Using Cryptocurrencies to Trade Oil, According to Sources

According to sources, as Russia negotiates global banking limitations, it is increasingly embracing cryptocurrency for the oil trade.

Four people with intimate knowledge of the situation claim that Russia is increasingly employing cryptocurrencies in its oil dealings with China and India in order to get around Western sanctions. Although the nation has openly supported cryptocurrency transactions and enacted legislation permitting them in foreign trade last summer, there had been no prior reports of its application in Russia’s oil industry.

According to sources, certain Russian oil businesses are converting Indian rupees and Chinese yuan into Russian rubles by using stablecoins like Tether, bitcoin, and ether. Even though this only makes up a small portion of Russia’s total oil trade—which the International Energy Agency estimates was worth $192 billion last year—its use is apparently increasing. Because of the delicate nature of the subject, all four sources agreed not to be named.

In the past, cryptocurrency has helped sanctioned nations like Venezuela and Iran maintain their economies without depending on the US dollar, which is the primary currency used in international oil transactions. Russia’s action comes after Washington reinstated sanctions and Venezuela began using digital currency more frequently in its petroleum and crude shipments. The fifth source, a researcher at an investigative company that monitors bitcoin usage to evade sanctions, claimed that Russia has set up several networks, of which Tether (USDT) is only one. Further information was not provided by the source, who was speaking under a non-disclosure agreement.

The Russian central bank previously admitted that sanctions-related payment delays have presented a significant obstacle to the Russian economy, but it did not reply to demands for comment. Although it’s still uncertain if sanctions will be withdrawn, US President Donald Trump is working to end the war in Ukraine and improve ties with Russia. Trump stated on March 7 that he is seriously considering further sanctions against Russia, despite Reuters reporting that the White House is examining alternatives for sanctions relief.

One of the four insiders claimed that because cryptocurrency is effective and can streamline processes, its use in Russian oil trading would probably continue even if sanctions were lifted and dollar transactions resumed.

Two people with knowledge of the transactions described how the deal works: A Chinese buyer of Russian oil deposits yuan into an offshore account that is managed by a middleman. After that, the intermediary turns the money into cryptocurrency, moves it to another account, and finally sends it to a third account in Russia, where it is exchanged for rubles.

According to a source with knowledge of a Russian oil trader’s activities in China, the trader’s monthly cryptocurrency transactions total tens of millions of dollars.