Revealed: How Russian businessmen use cryptocurrencies and "zero cross-border settlements" to solve 40% exchange rate losses in trade with Iran?

Russian companies trading with Iran have developed a complex payment system consisting of cryptocurrency transfers, Hawala underground exchanges, and “borderless internal settlements.” These innovations once successfully reduced up to 40% of export losses to nearly zero.

(Background: Elliptic revealed that five exchanges helped Russia evade sanctions; ABCeX alone traded $11 billion.)

(Additional context: Russia plans to block foreign crypto exchanges starting summer 2026, aiming to keep $15 billion in annual transaction fees domestic.)

Table of Contents

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• The huge losses caused by dual exchange rate systems
• Cryptocurrency and underground exchanges as solutions
• Zero-cross-border internal settlement system
• War disrupts logistics and financial hubs

To counter the massive profit losses caused by Iran’s strict official exchange rate system, Russian companies trading with Iran developed a sophisticated payment network involving cryptocurrency transfers, Hawala underground exchanges, and “borderless internal settlements.” These methods once significantly cut export losses by nearly 40%. However, the war that broke out in June 2025 brought this years-in-the-making system to a halt. The involved companies are now waiting for the conflict to subside to resume operations.

The huge losses caused by dual exchange rate systems

According to the latest revelations from BeinCrypto, the main reason Russian exporters seek alternatives is Iran’s unique currency system. Iran employs multiple exchange rates—official central bank rate, market rate, and corporate-specific rate—with large disparities among them. For example, in May 2024, the market rate reached 1 USD = 1.1 million rials, while the central bank’s official buy rate was only 600,000 rials, nearly half the market rate. Since Iranian buyers can only purchase foreign currency at official rates after goods arrive at warehouses, Russian exporters face an average forced loss of about 40% per transaction.

Large companies usually endure these losses quietly and wait up to six months for traditional bank dollar settlements. For small and medium-sized enterprises, this financial and time cost pushes them to seek alternative solutions.

Cryptocurrency and underground exchanges as solutions

To address the lengthy process and losses, cryptocurrencies have become the most practical payment tool for companies unwilling to accept 40% exchange rate losses. Russian firms use intermediaries in the United Arab Emirates (UAE) to pay in rubles, convert to crypto, and transfer funds across borders to Iran. This method maintains legal tax status within Russia and cleverly circumvents restrictions.

Besides cryptocurrencies, the long-standing Hawala informal exchange system is another option. It relies on trust between intermediaries; after providing a code, the actual cross-border transfer of equivalent funds is completed without moving money physically. Sergey Mikheev, Business Development Director at BiyskKotloStroy, a boiler engineering and construction firm, notes that Hawala works well for small transactions, but for large sums, systemic risks increase as intermediaries may abscond with the funds.

Zero-cross-border internal settlement system

Among all options, the most sophisticated is the “zero-funds cross-border” internal settlement architecture. This system operates through accounts set up by Russian-owned import-export companies in both Russia and Iran. When Russia exports goods, the system in Russia buys the goods from exporters in rubles, then sells them directly to Iranian buyers from an Iranian account, receiving rials; conversely, it purchases Iranian goods with accumulated rials and sells them back to Russian importers.

This model allows funds to stay entirely within the system, avoiding cross-border transfers, enabling Russian exporters to receive rubles domestically and eliminating exchange rate risk. Mikheev states that this business model can even bring VAT refunds in Russia, reducing export losses from 40% to nearly zero.

War disrupts logistics and financial hubs

Beyond financial innovations, this system relies heavily on Iran’s cost-effective logistics hub. Thanks to government fuel subsidies and a competitive private transportation sector, freight costs from China through Iran to Moscow are significantly lower than traditional routes. Additionally, trade routes passing through Tanzania and Iran can save about a week and half in transit time and halve transportation costs.

Unfortunately, the military conflict that erupted in June 2025 abruptly halted all operations. The war not only stopped cross-border trade but also damaged data centers of the UAE’s crypto infrastructure hubs, disrupting the entire network.