Russia uses Bitcoin to dodge sanctions in oil trades with China and India

Russia is using cryptocurrencies to facilitate oil trades with China and India, helping Moscow dodge Western sanctions in its $192 billion oil trade, Reuters has revealed.

The previously unreported practice involves Russian oil companies using bitcoin, ether, and stablecoins like Tether to convert Chinese yuan and Indian rupees into Russian rubles.

The process works through a series of steps. "A Chinese buyer of Russian oil pays a trading company acting as a middleman in yuan into an offshore account," according to sources who spoke to Reuters on condition of anonymity. The middleman converts this to cryptocurrency, transfers it between accounts, and ultimately converts it to rubles in Russia.

For one Russian oil trader's sales to China, these crypto transactions amount to "tens of millions of dollars per month."

Venezuela and Iran have used similar methods to keep their economies running while avoiding U.S. dollar transactions. Russia's approach comes after passing legislation last summer explicitly allowing digital currency in international trade.

"Cryptocurrencies are one of multiple ways of getting around payment issues," a Kremlin advisor told Reuters. Even if Western sanctions are lifted, one source indicated crypto would likely remain part of Russia's oil trading toolkit, noting: "It is a convenient tool and helps run operations faster."

Previously:
• HBO Bitcoin documentary claims to unmask Satoshi Nakamoto