Russia uses cryptocurrencies for oil trade with China and India

Russia is using Bitcoin, USDT, and other cryptocurrencies to trade oil with China and India to evade Western sanctions.

Russia leans on digital assets to trade oil internationally

According to Reuters, Russia has begun using cryptocurrency as a payment method in oil transactions with China and India. This move is seen as a way for Russia to evade Western economic sanctions, which have complicated international financial transactions using the USD or traditional payment systems. 

Russia is using cryptocurrencies in its oil trade with China and India to skirt Western sanctions, according to four sources with direct knowledge of the matter https://t.co/F4MBSwHAKC

— Reuters (@Reuters) March 14, 2025

Specifically, some Russian oil firms are utilizing cryptocurrencies like Bitcoin BTC, Ethereum ETH, and stablecoins (like Tether – USDT USDT) to conduct transactions with these two countries. The process often involves intermediaries to convert between each payment method. For example, a Chinese oil importer might pay in yuan to an intermediary company, which then converts the amount into Bitcoin before transferring it to Russia, where it is converted into rubles. Similarly, with India, oil traders will also convert rupees through cryptocurrency to complete payments.

Although this accounts for only a small portion of Russia’s $192 billion total oil trade volume (according to the International Energy Agency), the use of cryptocurrency is increasingly expanding. This aligns with Russia’s policy allowing the use of digital currencies in international trade. A source advising the Kremlin also confirmed that cryptocurrency is one of the solutions to address payment issues under sanction pressures.

However, it should be noted that the scale and effectiveness of this method remain limited compared to Russia’s massive oil trade demands, and it depends on the willingness of partners like China and India to adopt cryptocurrency over traditional currencies.

Russia’s policies towards cryptocurrency

The stance of Russian authorities toward digital assets has shifted from caution to pragmatism and greater openness. 

Initially, the Central Bank of Russia strongly opposed cryptocurrencies, proposing a ban due to concerns over money laundering and financial instability. However, since 2022, as Western sanctions tightened, Russia began viewing digital assets as a tool to bypass financial barriers, particularly in international trade, such as oil transactions with China and India.

By 2024, Russia passed a law legalizing cryptocurrency use in international commerce, reflecting support from the government, including President Putin. Domestically, however, Russia maintains strict control: cryptocurrencies cannot replace the rubles and are subject to rigorous regulations. Simultaneously, Russia is developing a digital ruble based on blockchain technology under state oversight. In summary, Russian authorities now strategically support digital assets to counter sanctions and boost trade, while retaining control to mitigate risks.