russia uses cryptocurrencies to trade oil with India and China

It is noted that although russia publicly encourages the use of cryptocurrencies, and last summer passed a law allowing payments in digital currency in international trade, it has not been reported that russia uses cryptocurrency in oil trade.

According to the sources, some russian oil companies are using bitcoin, ether and stablecoins such as Tether to convert Chinese yuan and Indian rupees into russian rubles. They added that this is a small but growing part of russia's overall oil trade, which reached $192 billion last year, according to the International Energy Agency.

The source, who is a researcher with a firm that tracks the use of cryptocurrencies to circumvent sanctions, said that russia has created many systems, and USDT (Tether) is just one of them.

Cryptocurrencies have already helped Iran and Venezuela, which are under US sanctions, to support their economies by avoiding the use of the dollar, which is the main currency for transactions in the global oil market. russia took this step after Venezuela stepped up the use of digital currency in oil and fuel exports after Washington reimposed sanctions.

According to one of the sources, the cryptocurrency is likely to continue to be used in the trade of russian oil, even if sanctions are lifted and the dollar can be used again. They added that it is a convenient tool that helps to conduct transactions faster.

The sources gave an example of how such trade works: a Chinese buyer of russian oil pays a trading company, an intermediary, in yuan to an offshore account. The intermediary converts the funds into cryptocurrency and transfers them to another account, and from there they are sent to a third account in russia and converted into rubles.

According to one of the sources familiar with the operations of the russian oil trader, the volume of cryptocurrency transactions in China is tens of millions of dollars a month.

According to analysts, traditional currencies still account for the bulk of russian oil transactions, although there are other workarounds, such as the use of the UAE dirham.

One of russia's cryptocurrency exchanges, Garantex, was hit with US sanctions in 2022 and EU sanctions last month. Last week, the platform suspended operations after Tether blocked digital wallets on its platform.

Source: Reuters