Russian Businesses Evade Sanctions with Stablecoins like Tether
Russian businesses are turning to stablecoins like Tether to evade international sanctions, according to recent reports. This shift is causing concern among global financial bodies and reshaping trade dynamics between Russia, China, and other countries.
Russian smugglers have started exploiting Tether, a popular stablecoin, to dodge restrictions on weapons and drone parts. Meanwhile, Russian mathematician Ivan Kotzov, who has worked with Tether, confirms the use of stablecoins in countries grappling with dollar liquidity issues or capital controls, extending beyond commodity trading.
Secondary financial sanctions are creating hurdles in commodity trade between Russia and China. Chinese banks, fearing US penalties, have begun rejecting Russian customers en masse. This has driven Russian companies, desperate for alternatives, to embrace stablecoins like Tether. Two Russian metal producers, not currently sanctioned, have already started using Tether for payments to and from China.
Russian central bank Governor Elvira Nabiullina has shown support for experimenting with cryptocurrencies in international payments, limited to cross-border trade and without public promotion. Stablecoins offer fast, low-cost transfers, bypassing traditional banking systems and sanctions.
The increasing use of stablecoins like Tether by Russian and Chinese traders is a response to difficulties in traditional bank transfers. While this shift allows for faster, cheaper transactions, it also entangles these countries more deeply in dollar dependence and forces them to adopt more efficient payment systems. The global financial community is closely watching this evolving landscape, as it could reshape international trade and sanctions enforcement.
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