Russia Uses Cryptocurrencies to Facilitate Oil Trade with China and India
Russia is utilizing cryptocurrencies to facilitate oil trade with China and India, circumventing Western sanctions affecting its $192 billion oil sector. Key developments include:
- The Bank of Russia proposed an experimental legal regime allowing a limited group of investors to trade cryptocurrencies.
- Some Russian oil firms are converting payments in Chinese yuan and Indian rupees into roubles using cryptocurrencies like bitcoin, ether, and stablecoins such as Tether.
- These crypto transactions currently account for a small portion of Russia's oil trade.
- Other sanctioned nations, such as Iran and Venezuela, have similarly adopted cryptocurrencies to avoid reliance on the U.S. dollar.
- Fiat currencies remain predominant in Russian oil transactions, with alternative methods including the UAE dirham.
- Even if sanctions are lifted, Russia is expected to continue using crypto due to its flexibility and convenience.
- The country is also exploring a digital ruble for broader retail and commercial usage.
The Bank of Russia has indicated that a ruble-backed central bank digital currency could serve as a tool against sanctions.