Russia Uses Gold, Crypto, and Unconventional Tactics to Bypass Western Sanctions

Russia's top regulator, Yury Chikhanchin, has revealed how the country's businesses are sidestepping Western sanctions. Companies are using gold, cryptocurrencies, and creative accounting tricks, such as "netting arrangements," to bypass sanctions. Russia's economy is also shifting its focus to the Middle East, Southeast Asia, and Central Asia, and the share of ruble, cryptocurrencies, and gold in trade settlements has increased.

Russia's top financial regulator, Yury Chikhanchin, has provided a rare insight into the country's strategies for circumventing Western sanctions. In a meeting with President Vladimir Putin, Chikhanchin revealed that Russian businesses are turning to gold, cryptocurrencies, and creative accounting tricks, such as "netting arrangements," to bypass sanctions [1].

Netting arrangements involve banks managing export and import payments through verified agents, with transactions centrally balanced to ensure counterparties receive their funds. This process minimizes the need to move money across borders, thus avoiding key chokepoints for international sanctions enforcement [2]. Additionally, the use of gold and cryptocurrencies has increased, with the share of payments in dollars, euros, and pounds significantly dropping [1].

The shift in focus to the Middle East, Southeast Asia, and Central Asia has also been noted. Chikhanchin mentioned that cross-border payments are now flowing more through these regions, aligning with the development of a unified fast payment system that serves as an alternative to SWIFT, primarily involving CIS countries [1].

Despite these tactics, signs of economic strain are emerging. An S&P Global survey found that manufacturing activity contracted sharply in June, and Russia's economy minister, Maxim Reshetnikov, warned that the country was "on the brink" of a recession [1]. While Russia's economy has shown resilience, it is losing momentum, with GDP growth slowing to 1.4% in the first quarter of 2025 compared to 4.5% in the fourth quarter of 2024 [1].

References:
[1] https://www.businessinsider.com/russia-economy-regulator-putin-companies-western-sanctions-netting-crypto-gold-2025-7
[2] https://finance.yahoo.com/news/russian-firms-netting-gold-crypto-152301825.html