Russian companies increasingly using Bitcoin amid sanctions, Reuters reports

Russian companies are increasingly using Bitcoin and other digital currencies for international payments in response to Western sanctions, Reuters reported on Dec. 25.

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Once key facilitators of Russia’s trade, Chinese banks have significantly curtailed transactions over fears of losing access to U.S. financial markets. By mid-2024, roughly 80% of Russian payments in Chinese yuan were reportedly rejected or returned.

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The shift follows legislative changes in Russia allowing cryptocurrencies in foreign trade to counter the impact of sanctions. Moscow has embraced cryptocurrencies, including legalizing Bitcoin mining.

Russian Finance Minister Anton Siluanov confirmed during a Russia-24 interview that domestically mined Bitcoin is now being used in foreign trade under an experimental framework.

“Such transactions are already occurring,” Siluanov said, emphasizing that digital currencies could become a key tool in international payments.

Sanctions have heavily restricted Russia’s access to traditional financial markets. Both the U.S. and the EU banned the export of dollars and euros to Russia in March 2022, reducing their use in trade.

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Chinese yuan initially filled the gap, becoming the most traded foreign currency in Russia. However, expanded U.S. sanctions targeting financial institutions doing business with Russia have further constrained payment options.

Russia and China have reportedly discussed barter-based trade as another mechanism to navigate sanctions-related payment challenges, Reuters reported earlier in August.