The companies in Russia operating in the commodities sector are increasingly using stablecoin to conduct transactions with their trading partners in China. What does it mean and what are the implications? All the details in the article.
Advantages and implications of stablecoin for Russia-China commercial exchanges
As anticipated, the Russian companies operating in the commodities sector, grappling with challenges in executing financial transactions with their Chinese counterparts, are adopting stablecoin as a solution.
According to a recent report by Bloomberg, in response to international restrictions and the tightening of compliance measures, these companies are increasingly using criptovalute.
Among these is included Tether, to facilitate cross-border transactions with their Chinese business partners.
The report indicates that the executives of two major producers of metals not subject to sanctions have confirmed the use of stablecoin for their transactions.
Some of these exchanges take place through Hong Kong, offering an alternative to the difficulties encountered by Russian companies in receiving payments for their goods and in purchasing equipment and raw materials.
The adoption of blockchain technology and stablecoins by Russian companies highlights the lasting impact of international restrictions imposed in response to the conflict in Ukraine.
Even in China, an important export market for Russian commodities, financial transactions have become more complex due to the threats of secondary sanctions from the United States Treasury Department.
Stablecoin offer advantages such as faster transactions and lower costs compared to traditional methods.
Ivan Kozlov, expert in digital currencies and co-founder of Resolv Labs, stated:
“With stablecoin, the transfer can take only 5-15 seconds and cost just a few cents, making such transactions extremely efficient when the sender already has assets in stablecoin.”
Given the limited alternatives for Russian companies, such as slower transactions or the risk of freezing bank accounts abroad, stablecoins emerge as an enticing choice.
Some non-sanctioned companies have even opened numerous bank accounts in different countries, only to see them frozen one after the other.
The use of cryptocurrencies expands beyond Russia
The use of cryptocurrencies for payments is not limited exclusively to Russian companies.
Countries subject to sanctions, such as Venezuela, are increasingly turning their attention to Tether for transactions. Often obtaining significant discounts, thanks to intermediaries based in Dubai who facilitate such operations.
This growing role of cryptocurrencies in international payments is leading to a change in the attitude of the Central Bank of Russia. In the past, the Bank of Russia had considered a total ban on cryptocurrencies.
However, the governor Elvira Nabiullina has expressed a certain degree of support for experimenting with cryptocurrency payments in international transactions.
La banca centrale ha chiarito agli istituti di credito che i pagamenti in criptovaluta sono accettabili solo per trasferimenti transfrontalieri e non devono essere pubblicizzati.
It is also considering the possibility of establishing a quadro normativo for the use of stablecoin in international transactions.
Furthermore, an increase in cryptocurrency activity among Russian citizens has been observed in recent quarters, which has led to the expansion of banking services related to cryptocurrencies in the country.
A recent report from the United Nations highlighted the popularity of Tether in cyber fraud and money laundering activities in Southeast Asia.
Tuttavia, Tether ha respinto tali affermazioni, sottolineando la sua cooperazione con le forze dell’ordine e la tracciabilità del suo token.
In response to the United Nations report, Tether stated that it collaborates with global law enforcement agencies such as the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the United States Secret Service (USSS).
Tutto ciò ha portato a una capacità di monitoraggio senza precedenti, superando i sistemi bancari tradizionali.