Russian Companies Bet on Cryptocurrencies in Global Trade Amid Sanctions

Russian companies focus on cryptocurrencies

Russian raw materials companies have more and more transformed to cryptocurrency to circumvent the financial obstacles posed by international sanctions.

Faced with the challenges facing traditional banking channels, companies are now leveraging stablecoins, particularly Tether (USDT), to facilitate “fast and seamless cross-border transactions” with their Chinese counterparts, as reported by Bloomberg.

Major Russian metal producers have mainly adopted this transition, looking for efficient alternatives to conventional financial systems to maintain their business operations.

How stablecoins are transforming international trade finance

These developments respond to economic expansion ramifications of international sanctions following geopolitical tensions that began in early 2022.

According to Bloomberg, despite not being directly affected by the sanctions, these companies have faced significant obstacles in conducting business internationally, particularly in receiving payments and acquiring necessary materials and equipment.

In particular, the adoption of stablecoins appears to be a strategic move to preserve business continuity and mitigate the risks associated with frozen bank accounts and the slow pace of traditional banking transactions.

As disclosed, the appeal of using stablecoins like Tether’s USDT lies in their ability to facilitate transactions quickly and cheaply. Ivan Kozlov, digital currency expert and co-founder of Resolv Labs, explained:

With stablecoins, the transfer can take as little as 5-15 seconds and cost a few cents, making such transactions quite efficient when the sender already has an asset base in stablecoins.

Furthermore, Kozlov revealed that the use of cryptocurrencies in trade finance it is gaining traction among non-sanctioned firms and as a broader practice in countries facing financial constraints or dollar “liquidity problems.”

This highlights a growing recognition of the potential of cryptocurrency as a “trusted” medium for substantial international transactions, especially in environments where traditional financial systems pose significant operational challenges.

Russia’s current crypto position

Meanwhile, the integration of cryptocurrencies into Russia’s trade mechanisms also means a change in the regulatory orientation of the country towards digital assets.

Bloomberg noted that, initially skeptical, the Russian central bank has changed its view, recognizing the potential advantages of cryptocurrencies in circumventing financial barriers.

The report said:

Previously, the Bank of Russia had considered a blanket ban on the use and creation of all cryptocurrencies, but Governor Elvira Nabiullina told parliament in November that she supported testing such payments in international transactions.

Amid these developments, strategic advisors such as Gabor Gurbacs of Tether and VanEck have contributed supported for the wider adoption of cryptocurrencies such as Bitcoin by central banks, especially for those countries that are experiencing a devaluation of fiat currency.

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Gurbac suggest that adding Bitcoin to national reserves could provide economic stability and diversification, proposing that countries begin allocating a small percentage to cryptocurrencies and gradually increase their holdings.

BTC price is moving higher on the 4-hour chart. Source: BTC/USDT active TradingView.com

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