Russian Commodities Firms Turn to Stablecoins to Evade Sanctions

Russian commodities firms have begun utilizing stablecoins, such as Tether Holdings Ltd.’s USDT, to facilitate cross-border transactions with Chinese clients and suppliers. The move comes two years after the start of the Russia-Ukraine conflict, which has led to challenges in receiving payments and purchasing equipment and raw materials, even for unsanctioned companies.

According to Bloomberg, which cited top executives at two major Russian metals producers who declined to be identified, the use of stablecoins has become a viable alternative to traditional banking channels, which have become increasingly difficult to navigate due to the threat of secondary sanctions by the US Treasury Department. 

The transactions, which sometimes go through Hong Kong, offer a faster and more cost-effective solution compared to slower transactions or the risk of frozen overseas bank accounts.

Ivan Kozlov, an expert on digital currencies and co-founder at Resolv Labs, told the publication that the use of stablecoins for cross-border settlements is not uncommon in countries facing dollar liquidity issues and capital controls. 

The growing role of cryptocurrencies in international settlements has also prompted a shift in the Russian central bank’s approach to the industry. While previously considering a blanket ban on cryptocurrencies, the Bank of Russia now supports experimenting with such payments for cross-border transactions.


Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

Giant Mining Encounters Native Copper As Hole MHB-34 Hits 563 Metres Depth

Verses Hits Commercialization Stage With Genius AI Platform

Related News

Is Russia’s Single Currency BRICS on the Brink of Failure?

The ambitious vision of a “single currency BRICS” championed by Moscow to challenge the dominance...

Tuesday, August 15, 2023, 06:17:00 AM

Russia Reportedly Bans Exports Following Latest Oil Sanctions From US, UK

It appears that Russian President Vladimir Putin isn’t having it with additional sanctions being levied...

Tuesday, March 8, 2022, 02:14:21 PM

Quebec Bans Oil and Gas Exploration

Quebec just became the first region in the world to ban oil and gas exploration...

Thursday, April 14, 2022, 04:27:00 PM

Thanks, But No Thanks: Kazakh President Rejects Belarusian President’s Offer to Join Union State

Kazakh President Kassym-Jomart Tokayev has firmly rejected Belarusian President Alexander Lukashenko’s recent offer for Kazakhstan...

Tuesday, May 30, 2023, 04:30:00 PM

Biden Administration Sanctions Even More Russian-Linked Entities, Including Rosatom

The United States has imposed sanctions on more than 120 targets in response to Moscow’s...

Friday, April 14, 2023, 07:32:28 AM