Key Takeaways
- • Russia is increasingly using noncurrency payment schemes, including gold, cryptocurrency, and netting, to maintain international trade access and evade Western sanctions, according to a RAND analysis.
- • Rosfinmonitoring head informed President Putin that Russia is reorienting trade toward the Middle East, Southeast Asia, and Central Asia and developing alternatives to SWIFT with CIS members.
- • The Duma passed a law by July 2024 permitting cryptocurrency use in international settlements, and Putin announced legalization of crypto mining in August 2024.
- • Key Russian financial actors are expanding crypto activity: Sberbank affirmed plans for custody services, Vladimir Potanin's Rosbank launched international crypto transactions in June 2023, and VTB appointed former CBDC lead Olga Skorobogatova to its board.
- • The analysis concludes the West must allocate resources to trace Russia's digital footprint, maintain economic pressure, and develop countermeasures to crypto-enabled sanctions evasion.
Summary
According to a RAND analysis, Russia is increasingly turning to noncurrency payment schemes to maintain access to international markets under Western economic pressure. The head of Rosfinmonitoring, Russia's anti-money-laundering agency, reportedly told President Vladimir Putin this month that the government is reorienting international trade toward the Middle East, Southeast Asia, and Central Asia, while developing alternatives to SWIFT with Commonwealth of Independent States members. Russia is also "actively employing" gold, cryptocurrency, and netting, a method that consolidates multiple payments to reduce transaction counts and exposure.
The analysis places these practices within a long history of illicit and nonfiat trade. Russia historically exchanged gold and diamonds for money and Western technology, often through opaque channels, and the trade became deliberately clandestine during the Bolshevik era. More recently, no-KYC cryptocurrency exchanges have enabled Russians to move fiat from sanctioned banks into crypto anonymously, with Chainalysis data indicating more than 100 such exchanges operated in 2024.
Russia's policy toward crypto has shifted. In 2022 the Central Bank of Russia described cryptocurrencies as risky and showing signs of a financial pyramid. By July 2024, however, the Duma had passed a law allowing crypto use in international settlements, and Putin announced legalization of crypto mining in August. Sberbank, Russia's largest retail bank, affirmed support for alternative payments and its intention to offer custody services. At the Russia Calling forum, Putin stated that "no one can prohibit the use of Bitcoin." Russia Calling is run by VTB, a sanctioned bank, and Olga Skorobogatova, who oversaw the unfinished development of a Central Bank Digital Coin, recently joined VTB's board to develop its international payment infrastructure.
The analysis cites further activity across the sector. In September 2024, Germany's Federal Criminal Police seized infrastructure of 47 no-KYC exchanges under "Operation Final Exchange," and a subsequent Chainalysis investigation found these services catered primarily to Russian clients. Promsvyazbank was reportedly found facilitating large-scale transfers via Kyrgyzstan using a ruble-pegged stablecoin, Rosatom has been implicated in a stablecoin laundering scheme, Rostec has launched a ruble-pegged stablecoin for international transactions, and a Reuters investigation found crypto wallets were used to pay spies operating in Europe.
The analysis concludes that crypto-to-fiat transfers offer Russia a faster alternative to illicit barter, though crypto leaves a traceable digital footprint that has prompted state-backed efforts to conceal transaction trails. It argues the West must dedicate resources to tracing these flows and developing countermeasures.
The analysis places these practices within a long history of illicit and nonfiat trade. Russia historically exchanged gold and diamonds for money and Western technology, often through opaque channels, and the trade became deliberately clandestine during the Bolshevik era. More recently, no-KYC cryptocurrency exchanges have enabled Russians to move fiat from sanctioned banks into crypto anonymously, with Chainalysis data indicating more than 100 such exchanges operated in 2024.
Russia's policy toward crypto has shifted. In 2022 the Central Bank of Russia described cryptocurrencies as risky and showing signs of a financial pyramid. By July 2024, however, the Duma had passed a law allowing crypto use in international settlements, and Putin announced legalization of crypto mining in August. Sberbank, Russia's largest retail bank, affirmed support for alternative payments and its intention to offer custody services. At the Russia Calling forum, Putin stated that "no one can prohibit the use of Bitcoin." Russia Calling is run by VTB, a sanctioned bank, and Olga Skorobogatova, who oversaw the unfinished development of a Central Bank Digital Coin, recently joined VTB's board to develop its international payment infrastructure.
The analysis cites further activity across the sector. In September 2024, Germany's Federal Criminal Police seized infrastructure of 47 no-KYC exchanges under "Operation Final Exchange," and a subsequent Chainalysis investigation found these services catered primarily to Russian clients. Promsvyazbank was reportedly found facilitating large-scale transfers via Kyrgyzstan using a ruble-pegged stablecoin, Rosatom has been implicated in a stablecoin laundering scheme, Rostec has launched a ruble-pegged stablecoin for international transactions, and a Reuters investigation found crypto wallets were used to pay spies operating in Europe.
The analysis concludes that crypto-to-fiat transfers offer Russia a faster alternative to illicit barter, though crypto leaves a traceable digital footprint that has prompted state-backed efforts to conceal transaction trails. It argues the West must dedicate resources to tracing these flows and developing countermeasures.
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