Russia is utilising cryptocurrency in oil commerce with China and India to avoid sanctions, according to Reuters.
Reuters reported on March 14 that Russia has begun utilising cryptocurrencies in oil transactions with China and India to bypass Western sanctions.
According to the International Energy Agency, the cryptocurrency scheme already accounts for a modest portion of Russia’s $192 billion annual oil trade, but its use is expected to grow.
According to the article, Chinese and Indian importers of Russian oil compensate intermediary trading organisations in yuan or rupees.
The monies are then transferred to offshore accounts, transformed into Bitcoin, Ethereum, or Tether stablecoins, and withdrawn to another account before being swapped for rubles in Russia.
According to Reuters sources, Russia will likely continue to use digital currencies in energy trading even when Western sanctions are repealed, noting the speed and flexibility of bitcoin transactions.
Meanwhile, Reuters reported that China’s state-owned oil corporations are limiting purchases of Russian petroleum due to concerns about U.S. sanctions.
The move comes after the Trump administration declined on March 13 to renew an exception that previously enabled Russian banks to use US payment networks for energy transactions.
The decision is expected to complicate Russian oil purchases and potentially lead to higher global energy costs.