NEWSLETTER
Amid continuous sanctions on war in Ukraine, Russia has resorted to bitcoin and other cryptocurrencies to facilitate part of its oil trade with the main Buyers China and India.
According A Reuters reportRussian oil companies and merchants make more and more transactions in bitcoin and cryptography, which allows them to avoid the restrictions of Western nations. The sources say that monthly commercial volumes are already in tens of millions of dollars.
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The mechanism involves Chinese or Indian buyers who buy oil and deposit Yuan or rupees in an high -seas account owned by an intermediate company. The intermediary then converts the fiduciary currency into cryptography and transfers it to an account in Russia, where it is exchanged in rubles.
While cryptographic oil payments remaining a fraction of total oil trade of $ 192 billion of Russia, the practice is growing as the sanctions bite. The trend highlights the usefulness of bitcoin and crypto to allow the transaction agreement for sanctioned nations. Iran and Venezuela have adopted similar cryptographic strategies. bitcoin and crypto censorship resistance allows value transfer outside the reach of sanctions.
At the end of 2024, Russia's Minister of Finance <a target="_blank" href="https://www.reuters.com/markets/currencies/russia-is-using-bitcoin-foreign-trade-finance-minister-says-2024-12-25/#:~:text=He%20singled%20out%20bitcoin%20as,the%20extensive%20use%20of%20cryptocurrencies.” target=”_blank” rel=”noopener”>publicly approved Use of crypt in foreign trade. The Kremlin sees bitcoin and crypto as one of several effective strategies to overcome the financial sanctions imposed on the invasion of Ukraine. The Russia Bank also recently proposed legalizing cryptographic investments for rich citizens.
However, Russia's oil trade is still based mainly on fiduciary currencies. The administration of President Donald Trump is discussing whether to relieve some restrictions to improve relations with Moscow.
With the Ukraine conflict still unsolved, the twin of Russia towards the use of bitcoin and decentralized technologies seems to aim to reduce its dependence on traditional finance and dollars agreements. Other countries under sanctions from the United States are probable to be monitored closely.
