According to Bloomberg, Russian commodities firms are utilizing the popular stablecoin USDT to carry out financial transactions with Chinese companies. The report, based on information from top executives at these companies, states that at least two metals producers in Russia are using USDT and other cryptocurrencies to facilitate cross-border transactions with their clients and suppliers in China. It is worth noting that these companies are not under any sanctions, and they sometimes route settlements through Hong Kong. Although China has not imposed sanctions on Russian companies following Russia’s invasion of Ukraine in 2022, Chinese lenders have reportedly tightened their compliance measures due to the risk of secondary sanctions for working with Russian firms. USDT, which is the largest stablecoin in terms of market capitalization, aims to maintain a 1:1 peg to the US dollar. Ivan Kozlov, the co-founder of crypto firm Resolv Labs, explains to Bloomberg that using stablecoins for cross-border transactions is a common practice in countries facing dollar liquidity issues and capital controls. He highlights that stablecoin transactions are efficient, with transfers taking just 5-15 seconds and costing only a few cents, especially when the sender already holds stablecoin assets. The report also mentions that some Russian steelmakers are opting to exchange their products for goods shipped into Russia instead of engaging in cross-border transactions.
