Russia has begun using cryptocurrencies in oil transactions with China and India to circumvent Western sanctions, Reuters reported on March 14, citing four sources familiar with the matter.
The cryptocurrency scheme currently represents a small fraction of Russia’s $192 billion annual oil trade, according to the International Energy Agency, but its usage is reportedly increasing.
According to the report, Chinese and Indian buyers of Russian oil pay intermediary trading firms in yuan or rupees.
The funds are then deposited into offshore accounts, converted into Bitcoin, Ethereum, or Tether stablecoins, and withdrawn to another account before being exchanged for rubles in Russia.
Reuters’ sources suggested that Russia will likely continue using digital currencies in energy trade even if Western sanctions are lifted, citing the speed and flexibility of cryptocurrency transactions.
Meanwhile, China’s state-owned oil companies are reportedly reducing purchases of Russian crude due to concerns over U.S. sanctions, Reuters reported, citing industry sources.
The move comes as the Trump administration on March 13 declined to renew an exemption that previously allowed Russian banks to access U.S. payment systems for energy transactions.
The decision is expected to complicate Russian oil purchases and could contribute to higher global energy prices.
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