Russia has started using Tether Holdings Ltd stablecoins and other cryptocurrencies to conduct financial transactions with China amid Western sanctions.
What is known about Russia's use of cryptocurrency for financial settlements with China
It is noted that in some cases, payments are made through Hong Kong.
The article emphasizes that the use of blockchain technologies by Russian companies in financial and trade transactions with China indicates the long-term impact of Western sanctions.
The authors point out that even China, which did not support Western sanctions against Russia for the criminal war launched by the Kremlin against Ukraine and has become a key market for Russian goods, as well as a supplier of goods and equipment, faces difficulties in conducting financial transactions with the aggressor country.
This happened, in particular, because the US Treasury threatened to impose secondary sanctions on creditors who contributed to the evasion of sanctions, which strengthened the measures.
With stable coins, the transfer can take only 5-15 seconds and cost a few cents, which makes such transactions quite effective if the sender already has a base of assets in stable coins, - digital currency expert Ivan Kozlov explains to the journalists of the publication.
How Russia and China learned to circumvent US trade sanctions
Tether's USDT stablecoin is pegged to the US dollar, making it even more convenient for exporters.
Company executives say the alternative could be slower transactions or the risk of a foreign bank account being frozen.
In countries facing problems of dollar liquidity and control of capital movements, cross-border payments using cryptocurrency and, in particular, stablecoins tied to the dollar, are a relatively common practice, and not only in the commodity sector, Kozlov emphasized.
The use of cryptocurrencies for payments is not unusual for countries under sanctions.
Some commodity companies have gone the other way to settle deals that were also once considered exotic.
Some steel companies use so-called barter agreements, in which the goods are exchanged for goods delivered to Russia, which makes it possible to completely avoid cross-border transfers.
