Russia Increasing Use of Cryptocurrencies in Oil Trade

Russia has promoted the use of cryptocurrencies and passed a law last summer legalizing digital currency payments in international trade.

Some Russian oil companies are using Bitcoin, Ether, and Tether stablecoins to convert Chinese yuan and Indian rupees into Russian rubles. According to the International Energy Agency, Russia’s oil trade was valued at $192 billion last year.

Cryptocurrencies have helped countries like Iran and Venezuela, both subject to US sanctions, continue their economies without relying on the dollar. Russia’s move comes after Washington reimposed sanctions and Venezuela accelerated digital currency usage.

Russia has set up various systems, with Tether (USDT) being one of them, according to a fifth source, a researcher tracking the use of cryptocurrencies to evade sanctions.

Trump’s Sanctions Decision Uncertain, Crypto Continues in Oil Trade

US President Donald Trump seeks to improve relations with Russia to end the war in Ukraine, but it remains unclear whether sanctions will be lifted. Cryptocurrencies are expected to continue being used in Russia’s oil trade even if sanctions are lifted.

Cryptos are seen as a practical tool that speeds up transactions. Chinese buyers pay yuan for Russian oil, which is then converted into cryptocurrency and transferred to Russia. A Russian oil trader’s monthly sales to China involve cryptocurrency transactions worth tens of millions of dollars.

Russia’s Increasing Role of Cryptocurrencies and Alternative Payment Methods in Oil Trade

Analysts note that while traditional currencies still make up the majority of Russia’s oil transactions, alternative payment methods, like the UAE dirham, are also being used.

A Russian cryptocurrency exchange, Garantex, which was sanctioned by US in 2022 and by the European Union last month, suspended its services last week. Tether blocked the exchange’s digital wallets.

One source mentioned that cryptocurrencies are being used to overcome payment challenges.

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Legal entities and individual entrepreneurs registered in the Ministry of Digital Development’s registry will be able to officially mine Bitcoin and other cryptocurrencies with the law. This will create a new economic activity area in Russia for both local and international investors.

Russia Takes Important Step for Bitcoin Mining

Russian citizens who are not individual entrepreneurs will also be able to benefit from this law. However, in order for these individuals to be able to mine, they will need to not exceed the energy consumption limits set by the government. As long as they comply with these limits, they will be able to mine digital currencies without being registered in the registry.

The energy consumption limits set by the government aim to minimize the potential negative impact of mining activities on the country’s energy infrastructure. These limits will help ensure the country’s overall energy security by controlling individual miners’ energy consumption.

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The new law signed by Russian President Putin is considered one of Russia’s important steps in the field of digital economy and technology. The legalization of cryptocurrency mining will attract the attention of investors both locally and globally and will revitalize the country’s digital economy. In addition, this regulation will strengthen Russia’s position in digital currencies and blockchain technologies.

After the law signed by Putin, Bitcoin recorded a very serious increase and exceeded $58,000. Although profit sales occurred after this price movement in Bitcoin, its ability to hold on to the $58,000 band will turn the market outlook positive.

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