According to a Reuters report, Russian businesses have been utilizing cryptocurrencies like Bitcoin and USDt to enhance trade with China and India as a response to international sanctions.
As reported by Reuters on March 14, Russian oil firms have employed crypto-assets such as Bitcoin (BTC) and Tether’s USDt (USDT) for cross-border trade, drawing insights from four sources familiar with the situation.
A Russian oil trader is said to be processing tens of millions of dollars in monthly transactions through digital assets, as noted by an anonymous source due to confidentiality agreements.
While the Russian finance minister made a public statement in late 2024 indicating that Russia can utilize assets like Bitcoin for foreign trade, the application of cryptocurrencies in oil dealings with China and India had not been previously disclosed.
How crypto facilitates Russia’s oil trade
As per Reuters, Russia’s foreign oil transactions using crypto involve intermediaries that manage offshore accounts and process payments in the buyer’s local currency. For instance, a Chinese buyer purchasing Russian oil makes payments to a trading company acting as a facilitator in yuan, into an offshore account.
The intermediary converts these payments into crypto assets and transfers them to another account, which subsequently forwards them to a third account in Russia, where they are exchanged for Russian rubles, according to the sources.
Crypto usage resilient despite sanctions
One of the sources cited by Reuters indicated that cryptocurrencies will likely continue to play a role in Russia’s foreign oil trading, regardless of the imposition or removal of sanctions, even if Russia gains the ability to operate with the dollar.
“It is a convenient tool and streamlines operations,” the report quoted the source.
This development coincides with the Bank of Russia’s proposal to officially allow cryptocurrency investments for high-net-worth individuals possessing at least $1.1 million in securities and deposits.
Mainland China maintains restrictions on Bitcoin
While Russia is becoming more receptive to Bitcoin, particularly for foreign trade, mainland China has upheld a cautious and restrictive stance towards cryptocurrencies.
Since virtually prohibiting all crypto transactions in 2021, Chinese authorities have continued their restrictive policies on cryptocurrencies, while nearby Hong Kong has established itself as a global crypto hub.
Related: Indian authorities apprehend alleged Garantex founder for extradition to the U.S.
In spite of these regulations, mainland China remains one of the leading nations in Bitcoin mining, raising questions regarding the effectiveness of its crypto ban.
Source: Jan3
As the United States progresses with its strategic Bitcoin reserve initiative, some industry analysts believe that China will not overlook Bitcoin’s emerging significance in the global financial arena.
Data from the Bitcoin technology firm Jan3 suggests that the Chinese government may be holding at least 193,000 BTC.
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