Russia using Bitcoin, USDt for oil trades with China and India: Report
Russian Companies Turn to Bitcoin and Crypto for Trade with China and India Amid Sanctions
Russian businesses, particularly in the oil sector, have increasingly turned to cryptocurrencies like Bitcoin (BTC) and USD Tether (USDT) to bypass international sanctions and facilitate trade with China and India, according to a recent Reuters report.
Russian Oil Industry’s Use of Bitcoin and Tether
As per the March 14 report, Russian oil traders are leveraging digital currencies for international transactions. Several sources with direct knowledge of the situation revealed that these companies have used Bitcoin and USDT to conduct significant trade deals. One Russian oil trader, speaking on the condition of anonymity, disclosed that their company conducts transactions worth tens of millions of dollars monthly using digital assets.
In late 2024, Russia’s finance minister confirmed that the country had full freedom to use digital currencies, such as Bitcoin, for foreign trade. However, the use of cryptocurrencies in oil transactions with China and India had not been previously disclosed.
How Russia’s Crypto Oil Trade Works
According to Reuters, the process for conducting oil trades using crypto involves intermediaries who manage offshore accounts and convert payments into local currencies. For instance, a Chinese buyer purchases Russian oil and sends payment in yuan to a trading company. This company acts as an intermediary and deposits the payment into an offshore account. The intermediary then converts the payment into cryptocurrencies and transfers the funds to another account, which eventually sends it to a third account in Russia, where the crypto is exchanged for Russian rubles.
Crypto: A Continued Solution for Russian Oil Trade
Despite ongoing sanctions, sources indicate that cryptocurrency will likely remain a core component of Russia’s foreign oil trade, even if restrictions are lifted. One insider stated that crypto provides an efficient, fast, and convenient method for handling large transactions, making it an appealing solution for Russian traders.
Russia’s Increasing Crypto Adoption Amid Sanctions
In addition to using crypto for oil trades, the Russian government has also proposed legalizing cryptocurrency investments for high-net-worth individuals, specifically those with at least $1.1 million in securities and deposits. This move signals Russia’s growing openness to cryptocurrency as a legitimate financial tool in the face of international sanctions.
Bitcoin Mining: A Global Perspective and China’s Role
While Russia embraces Bitcoin, China remains cautious, maintaining strict cryptocurrency regulations within its mainland. Since banning most crypto transactions in 2021, China has continued its restrictive stance, while Hong Kong has emerged as a thriving global hub for crypto. Despite the ongoing ban, China remains one of the world’s leading players in Bitcoin mining, a situation that has raised questions about the effectiveness of its crypto ban.
Industry experts have speculated that, despite its restrictions, China may not ignore the growing significance of Bitcoin in the global financial market. According to Jan3, a Bitcoin technology company, the Chinese government may be holding as much as 193,000 BTC, further fueling debates on China’s evolving stance towards cryptocurrency.
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