Russia Uses Cryptocurrency to Bypass Sanctions in Oil Trade
Russia has started using cryptocurrency to sell oil to China and India. This is to avoid getting punished by the West, according to a Reuters report on March 14.
Russian oil buyers pay intermediary trading firms in yuan or rupees. The money is then converted into digital currencies like Bitcoin or Ethereum and withdrawn from an offshore account. It’s finally exchanged for rubles in Russia.
This practice makes up a small part of Russia’s $192 billion annual oil trade, but it’s growing. Reuters’ sources say that even if Western sanctions are lifted, Russia will likely keep using cryptocurrency in energy trades because of its speed and flexibility.
China’s state-owned oil companies are reducing their purchases of Russian crude due to concerns over U.S. sanctions. This is after the Trump administration declined to renew an exemption for Russian banks to access U.S. payment systems for energy transactions on March 13.
The decision could make it harder for Russia to sell its oil and contribute to higher global energy prices.
