Russian enterprises are increasingly turning to cryptocurrencies such as Bitcoin and Tether (USDT) to conduct trade with China and India amid ongoing international sanctions, according to a report from Reuters.
Citing four individuals familiar with the matter, the report suggests that Russian oil firms have employed digital currencies, including Bitcoin (BTC) and Tether (USDT), to facilitate global trade. One particular oil trader is said to process transactions worth tens of millions of dollars each month through crypto, according to an anonymous source bound by a non-disclosure agreement.
Although Russia’s finance minister publicly acknowledged in late 2024 that the country could utilize Bitcoin for international transactions, the specific use of crypto in oil trade with China and India had not been widely reported until now.
How Does Russia’s Crypto Oil Trade Function?
As per Reuters, the process of conducting oil transactions via cryptocurrency involves intermediaries managing offshore accounts and facilitating payments in the buyer’s local currency. For example, a Chinese purchaser of Russian oil sends funds in yuan to a trading entity acting as a go-between, which deposits the payment into an offshore account.
This intermediary then converts the funds into digital assets, transferring them to another account, which subsequently routes them to a Russian account where they are exchanged for rubles, sources revealed.
Crypto Usage Continues Despite Sanctions
According to one of Reuters’ sources, cryptocurrency will likely remain a fundamental tool in Russia’s foreign oil trading, irrespective of whether sanctions remain in place or are lifted, allowing Russia to transact in U.S. dollars.
“It’s an efficient mechanism that accelerates business operations,” the source was quoted as saying.
This development comes as the Bank of Russia is reportedly exploring the possibility of legalizing cryptocurrency investments for high-net-worth individuals possessing at least $1.1 million in securities and deposits.
China’s Strict Crypto Regulations Remain in Place
While Russia continues to embrace Bitcoin, including its use in cross-border trade, mainland China has maintained its stringent stance on cryptocurrency transactions.
Since implementing an extensive ban on crypto-related activities in 2021, Chinese authorities have upheld their restrictive policies. Meanwhile, Hong Kong has emerged as a significant crypto hub in the region.
Despite the prohibition, China remains a dominant force in global Bitcoin mining, leading to debates about the practical implications of its crypto ban.
As the United States advances its initiative to establish a strategic Bitcoin reserve, some analysts believe that China may not be able to overlook Bitcoin’s increasing influence on global finance.
Data from Bitcoin technology company Jan3 suggests that the Chinese government could be holding at least 193,000 BTC, reinforcing speculation about its long-term stance on the asset.
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