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Russia: trading oil in crypto to avoid sanctions
By Davide Grammatica
Russia is reportedly using an increasing share of crypto to trade oil with China and India to circumvent sanctions
Crypto, oil and sanctions: Russia's move
According to a recent Reuters report, Russia is reportedly using an increasing share of cryptocurrencies to evade Western sanctions. This would mainly involve the oil trade with China and India, with Bitcoin facilitating the conversion of yuan and rupees into rubles.
Stablecoins would also be used, despite the fact that Tether (like any other issuer, for that matter) has the option of freezing funds at the initiative of the legislative bodies.
According to Reuters sources, the exchanges would be in the order of tens of millions of dollars per month.
All this is made possible directly by the Russian government, which last December allowed the use of crypto for international payments (precisely to counter the sanctions). After the outbreak of war in Ukraine, Russia’s trade with China and India had been severely compromised, and even Indian and Chinese actors exercised extreme caution to avoid repercussions with the West.
In the past, Chainalysis had already reported on the Russian central bank’s efforts to create an exchange infrastructure suitable for this type of trade, but only today has the extent of the operation become known. Russia’s annual oil trade alone is worth $192 billion.
Russia increasingly pro-crypto
In early March, senior Russian official Anton Gorelkin reiterated the usefulness of crypto in the context of sanctions, which continue to undermine commercial operations in the country with initiatives such as the blocking of the Russian exchange Garantex in the EU.
Cryptocurrencies are not the only solution for circumventing sanctions, but it is a fact that their adoption in this sense is growing. In Venezuela (also under US sanctions), for example, cryptocurrencies are increasingly used to facilitate oil exports.
As already mentioned, at the beginning of the week Russia also launched a three-year experimental initiative to allow qualified investors to operate through crypto. In this sense, there is clearly a growing adoption process in the country, and this goes against the recent trend. Only in 2022, Vladimir Putin had banned payments in cryptocurrencies, while today there are several openings on the part of the institutions.
