Russian companies use USDT for commodity trade with China

Some Russian commodity companies have recently experienced problems processing financial transactions with their Chinese partners. The surprising solution, according to a Bloomberg report: the stablecoin USDT.

At least two large, unsanctioned metal producers are reportedly using USDT and several other cryptocurrencies to settle some of their cross-border transactions with Chinese customers and suppliers.

USDT's adoption is seen as a response to international sanctions due to geopolitical tensions, which temporarily peaked with the start of Russia's war of aggression in Ukraine in February 2022. According to the report, there are no direct U.S. sanctions against the companies. Still, they face obstacles in conducting their international business activities, especially in receiving payments.

The U.S. and its Western allies have introduced, among other sanctions, the exclusion of Russia from the SWIFT banking network. A drastic measure. "With stablecoins, transfers can take only 5 to 15 seconds and cost a few cents, making such transactions very efficient," said crypto analyst Ivan Kozlov, explaining the shift to USDT. The use of stablecoins such as USDT for international payments is not uncommon for sanctioned countries.