Russia goes crypto in oil trade with China and India: report

Russia is using cryptocurrencies in its oil trade with China and India to bypass Western sanctions.

This is according to a report from Reuters published on March 14, and which cited multiple sources in the know regarding the matter.

Use of crypto for oil marks a significant shift for Russia's handling of its lucrative oil exports.

Notable is that the country’s oil exports is a staggering $192 billion market as per the International Energy Agency.

New take on crypto in increasingly crypto-friendly Russia

Russia has over the past few years taken a pro-crypto stance, openly promoting the use of cryptocurrencies. Indeed, lawmakers passed a law that allows use of crypto in international trade in 2024.

However, the country has not announced it was using this new payment option across the oil sector before.

Sources say this has recently changed.

Now companies are collaborating with Indian and Chinese counterparts to accept Bitcoin (BTC), Ethereum (ETH) and stablecoins.

According to the sources, oil companies are tapping into BTC, ETH and USDT among other digital assets, with these allowing them to convert Chinese yuan and Indian rupees into Russian rubles. 

While this makes up just a fraction of the entire Russian oil trade, people familiar with the operations say crypto for oil is on the upward trajectory in Russia.

The shift to crypto follows a pattern seen in other sanctioned nations like Iran and Venezuela, where digital currencies have helped sustain economies by sidestepping the US dollar, the dominant currency in global oil markets. 

Russia’s adoption of crypto has grown as sanctions hit following the war with Ukraine.

The move mirrors Venezuela’s flip to crypto for crude and fuel exports also ramped up amid US sanctions.

According to the Reuters report, cryptocurrencies are likely to remain part of Russia’s oil trading even if sanctions were lifted and the dollar became an option again.

Sources alleging as much include a researcher at an investigations firm tracking cryptocurrency use for sanctions evasion. 

Read more: Oil trade shifts: How sanctions on Russia are reshaping flows to India and China

Trump’s push for peace deal

The development coincides with the US President Donald Trump’s efforts to improve ties with Russia amid his push to end the war in Ukraine. 

However, the future of sanctions remains uncertain.

Reuters reported that the White House is drafting options for sanctions relief, yet Trump posted on March 7 that he is seriously considering additional sanctions on Russia.

Cryptocurrencies are just one of several workarounds Russia has employed to address payment hurdles, said one source who advises the Kremlin. 

Bitcoin and altcoins soared as Trump took office in January, with his pro-crypto stance a key factor in the optimism across the market.

This is despite recent sell-off related to tariffs and trade wars, with analysts saying more pain is likely in the short term.