Russian commodity companies are reportedly using the leading stablecoin USDT to conduct financial transactions with Chinese companies.
At least two metals producers in Russia are using Tether-issued stablecoins and other cryptocurrency assets to facilitate cross-border transactions with customers and suppliers in China, Bloomberg reported, citing “top executives of the companies.” .
It has been reported that companies that have not been sanctioned sometimes deliver settlement payments through Hong Kong.
China has not sanctioned Russian companies even after Russia’s invasion of Ukraine in 2022, but Chinese lenders are reportedly still strengthening compliance measures due to the possibility of secondary sanctions if they cooperate with Russian companies.
USDT is the leading stablecoin by market capitalization and aims to maintain a 1:1 peg with the US dollar.
Ivan Kozlov, co-founder of cryptocurrency firm Resolv Labs, told Bloomberg that cross-border trading of dollar-pegged stablecoins is a “relatively common practice” in countries facing dollar liquidity issues and capital controls.
“With stablecoins, transfers only take 5 to 15 seconds and cost only cents, making these transactions very efficient if the sender already has an asset base in stablecoins.”
Some Russian steelmakers are sometimes avoiding cross-border trade altogether and sending products abroad in exchange for goods shipped to Russia, Bloomberg reported.
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