Russia Says It Uses Bitcoin for Trade Payments Amid Efforts to Sidestep Sanctions

Russia is increasingly leveraging Bitcoin and other digital currencies in international trade to counteract Western sanctions, according to Finance Minister Anton Siluanov.
“Such transactions are already occurring. We believe they should be expanded and developed further,” Siluanov stated during an interview with Russia 24, as reported by Reuters. “I am confident this will happen next year.”

The move comes after Russia’s July announcement of a plan to legalize cryptocurrency for international trade. This shift to digital assets represents a significant departure from years of restrictions on Russia’s global financial activities.

Western sanctions on Russia began in 2014, following President Vladimir Putin’s annexation of Crimea. These measures intensified in 2022 after Russia’s broader invasion of Ukraine. In response, Russia has experimented with cryptocurrencies to bypass financial restrictions, including the operation of a sanctioned crypto exchange that has reportedly processed over $20 billion in transactions.

Notably, Russian firms have embraced stablecoins such as Tether for trade with Chinese partners, according to a Bloomberg report from May. In July, Russia passed a law allowing businesses to use cryptocurrency officially in international transactions.

However, this strategy has drawn scrutiny, particularly concerning Tether. The Wall Street Journal reported in October that U.S. authorities are investigating Tether for potential sanctions violations and anti-money laundering breaches. Tether CEO Paolo Ardoino denied these claims, labeling them as unfounded.

Adding to the complexity, Donald Trump’s administration has shown a more favorable stance toward cryptocurrencies. Trump’s pick for Secretary of Commerce, Howard Lutnick, is a known Tether supporter and reportedly holds a 5% stake in the company.

On the market front, Bitcoin has fallen 2.8% in the past 24 hours, trading at $95,640, while Ethereum is down 3.5% at $3,369.

BitGalactic’s Take
Russia’s pivot to cryptocurrencies highlights a growing trend of nations exploring decentralized finance as a workaround for economic sanctions. While this move may bolster its trade capabilities in the short term, it also raises questions about the broader implications for global financial stability and regulatory oversight. BitGalactic will continue monitoring how this evolving geopolitical landscape influences the cryptocurrency market and the role of major players like Tether.