Among the ongoing penalties on the war in Ukraine, Russia turned to Bitcoin and other cryptocurrencies to facilitate part of its oil trade with the main buyers China and India.
According to a Reuters report, Russian oil companies and merchants make more and more transactions in Bitcoin and Crypto, allowing them to get around the restrictions from Western nations. The sources say that monthly commercial volumes are already in tens of millions of dollars.
The mechanism involves Chinese or Indian buyers who buy oil and deposit Yuan or rupees in an offshore account owned by a Middleman company. The intermediary then converts the Fiat currency to cryptocurrency and transfers it to a report in Russia, where it is exchanged in rubles.
While crypt -based oil payments are still a fraction of the total oil trade in $ 192 billion in Russia, the practice is growing as a bite of sanctions. The trend highlights the utility of Bitcoin and Crypto in allowing transactions for transactions for sanctioned nations. Iran and Venezuela have adopted similar encryption strategies. The censorship resistance of Bitcoin and Crypto allows the transfer of value beyond the scope of the sanctions.
At the end of 2024, the Minister of Finance of Russia publicly approved using cryptocurrency in foreign trade. The Kremlin sees Bitcoin and Crypto as one of the different effective strategies to overcome the financial sanctions imposed on the invasion of Ukraine. The bank of Russia has also proposed to legalize cryptographic investments for rich citizens.
However, Russian oil trade is still based mainly on Fiat currencies. The administration of President Donald Trump is discussing whether to facilitate some restrictions to improve Moscow relations.
With the Ukrainian conflict still unsolved, the Russian pivot to exploit Bitcoin and decentralized technologies seems to aim to reduce its dependence on traditional finances and dollar settlements. Other countries are likely to be monitored closely under US sanctions.