Russia Turns to Bitcoin, USDT for Oil Sales Amid Western Sanctions

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Russia is turning to cryptocurrencies in its oil trade with China and India to avoid Western sanctions, four sources familiar with the matter told Reuters on Friday.

While Russia has openly supported the use of digital currencies and passed a law allowing crypto payments in international trade last year, its role in oil transactions had not been previously reported.

Some Russian oil companies are using Bitcoin, Ether, and stablecoins like Tether (USDT) to convert Chinese yuan and Indian rupees into Russian roubles, the sources said. Although crypto still accounts for a small share of Russia’s $192 billion oil trade, its use is growing.

Cryptocurrencies have long been a tool for sanctioned countries such as Iran and Venezuela to keep trade flowing without relying on the U.S. dollar. Venezuela, for example, ramped up crypto transactions in crude and fuel exports after the U.S. reimposed sanctions. A fifth source, a researcher tracking cryptocurrency-based sanctions evasion, said Russia has set up multiple systems for international transactions, with USDT being just one method.

Russia’s central bank did not respond to requests for comment, but last year it acknowledged that payment delays due to sanctions were hurting the economy.

Meanwhile, U.S. President Donald Trump is working to improve relations with Russia while also considering tougher sanctions. The White House has been weighing options for sanction relief, but Trump said on March 7 that he is strongly considering more sanctions on Russia.

One of the sources said crypto is likely to remain in Russian oil trade even if sanctions are lifted, as it makes transactions faster and more efficient.

A typical deal works as follows: A Chinese buyer pays a middleman in yuan into an offshore account. The middleman converts the money into crypto, transfers it through multiple accounts, and eventually converts it to roubles in Russia. According to one source, a Russian oil trader handling sales to China moves tens of millions of dollars in crypto transactions each month.