Russia is increasingly utilizing cryptocurrencies to conduct oil trade with China and India, according to multiple sources with direct knowledge of the transactions. This move allows the country to navigate Western sanctions and continue its lucrative energy exports. While the Russian government has publicly supported the use of digital currencies for international trade, this is the first time its application in the oil sector has been highlighted.

Russian oil companies have reportedly adopted Bitcoin, Ethereum, and stablecoins like Tether to facilitate the conversion of Chinese yuan and Indian rupees into Russian roubles. The sources emphasized that although crypto transactions currently constitute a small portion of overall oil trade, their usage is expanding rapidly. The International Energy Agency valued Russia’s oil trade at $192 billion last year, underscoring the significance of these developments.

The use of cryptocurrencies in sanctioned economies is not new. Countries such as Iran and Venezuela have previously leveraged digital currencies to maintain trade flows despite U.S. restrictions. Venezuela, in particular, accelerated its adoption of crypto-based transactions after Washington reinstated sanctions. Russia now appears to be following a similar trajectory.

A fifth source, a researcher tracking the use of cryptocurrencies for sanction evasion, noted that Russia has developed multiple systems for such transactions, with Tether being just one of them. The Russian central bank has remained silent on the matter, though it acknowledged last year that delayed payments due to sanctions had become a significant economic hurdle.

While geopolitical tensions continue to shape international trade, the role of crypto in Russia’s oil exports is likely to persist. The White House has been reportedly drafting options for sanctions relief, but with uncertainty surrounding U.S.-Russia relations, digital currencies offer an alternative means for swift and unrestricted transactions.

A typical transaction involves a Chinese buyer making payments in yuan to a middleman company’s offshore account. The middleman converts these funds into cryptocurrency, which is then transferred through multiple accounts before ultimately being exchanged for Russian roubles. In some cases, these transactions amount to tens of millions of dollars each month, according to sources familiar with the matter.

Despite the rise of crypto in oil trade, traditional currencies still dominate the bulk of Russia’s transactions. The country has also employed other financial workarounds, such as using the UAE dirham. However, the increasing reliance on digital assets signals a growing shift in how sanctioned economies adapt to financial restrictions.

One Russian crypto exchange, Garantex, was placed under U.S. sanctions in 2022 and later blacklisted by the European Union. Following Tether’s recent move to block digital wallets associated with the platform, Garantex suspended its services last week. These developments highlight the ongoing regulatory challenges surrounding crypto-based transactions in global trade.

According to sources advising the Kremlin, cryptocurrencies represent just one of several methods Russia is utilizing to circumvent payment restrictions. Analysis from institutions like the UK’s Royal United Services Institute supports this assessment, suggesting that Moscow’s financial maneuvering is likely to continue.

Even if sanctions were lifted, some industry experts believe crypto would still play a role in Russia’s oil trade. Its efficiency and speed make it an attractive option for businesses seeking to minimize transaction delays and operational disruptions.