Russian, Chinese Firms Turn to Stablecoins for Sanction-Bypassing Commodity Trades
Russian and Chinese companies are turning to stablecoins like USDT (Tether) for commodity trades due to banking hurdles. This shift is driven by U.S. sanctions causing payment issues, even for non-sanctioned firms.
Two Russian metal producers have started using Tether for transactions, bypassing banking issues. They deliver metals to China and import machinery without relying on traditional banking methods.
Chinese banks may refuse Russian customers to avoid U.S. penalties. This pushes companies towards stablecoins, which offer quick, low-fee transfers without involving banks. The more effective sanctions are, the more companies adopt this strategy.
However, this practice doesn't help BRICS nations break away from the dollar. Instead, it entangles them more with it. Moreover, Russian smugglers are using Tether to evade sanctions on weapons and drone parts.
Sanctions force Russia and China to adopt more efficient payment systems, years ahead of those in Europe and the U.S. The Russian Central Bank supports crypto payments in international trade, but limits acceptance to cross-border trade and disallows advertising.
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