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Russia using cryptocurrency in oil trade with China, India to bypass sanctions, Reuters reports

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Russia using cryptocurrency in oil trade with China, India to bypass sanctions, Reuters reports
Representation of Bitcoin and other cryptocurrencies are seen in this illustration photo taken on June 26, 2023. (Jakub Porzycki/NurPhoto via Getty Images)

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The funds are then deposited into offshore accounts, converted into Bitcoin, Ethereum, or Tether stablecoins, and withdrawn to another account before being exchanged for rubles in Russia.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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Tim Zadorozhnyy

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Tim Zadorozhnyy is a reporter at the Kyiv Independent covering foreign policy, U.S.-Ukraine relations, and political developments across Europe and Russia. He studied International Relations and European Studies at Lazarski University and Coventry University. Tim began his journalism career in Odesa in 2022 as a reporter for a local television channel. He later spent a year and a half at the Belarusian independent media outlet NEXTA, first as a news anchor and later as a managing editor. He is fluent in English, Ukrainian, and Russian.

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