Russia has resorted to cryptocurrencies to facilitate oil trade with China and India, without effectively ignoring Western sanctions in its oil trade of $ 192 billion, Reuters reported, citing familiar sources with the matter.
The country has moved slowly more deeply in the cryptocurrency space. Just this week, the Russian Bank presented proposals to create an experimental legal regime (ELR) that lasts three years, allowing a “limited group of Russian investors” to exchange cryptocurrencies.
Some Russian oil companies use Bitcoin, Ether and Stablecoins such as Tether (USDT) to turn payments made into Chinese yuanes and Indian rupees in Rublos, according to the Reuters report. These transactions currently represent a fraction of Russia’s oil trade.
Other sanctioned countries, including Iran and Venezuela, have used cryptography to maintain trade while avoiding the dependence of the US dollar, the dominant currency in world oil markets.
Russia has developed multiple payment systems to navigate the sanctions, and Crypto is one of several tools used by the country. Fiduciary currencies remain the main method used in Russian oil transactions, and other solutions include the use of currencies such as United Arab Emirates Dirham, Reuters said.
The report also added that even if the sanctions were lifted, Russia would probably continue to use cryptography in its oil trades, since it is considered a convenient and flexible tool. Meanwhile, the country is looking to obtain its largest banks to support a digital ruble for retail and commercial use.
The Bank of Russia said that a central bank digital currency backed by Rublo could be used as a tool against sanctions in 2021.
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