Bloomberg: Russia Begins Using Cryptocurrency for Trade with China

Russian commodity companies that have had difficulties in conducting financial transactions with Chinese partners have begun using cryptocurrencies for payments. Bloomberg reported the news, citing people familiar with the matter, according to the Ukrainian state news agency.

At least two of the largest metal producers that are not subject to Western sanctions have begun using Tether Holdings Ltd stablecoins and other cryptocurrencies to settle international transactions with mainly Chinese customers and suppliers, Bloomberg wrote. In some cases, payments are made through Hong Kong.

"The fact that large Russian companies are turning to blockchain two years after the invasion of Ukraine began in February 2022 highlights the long-term impact of international restrictions imposed on the country's economy in response to the war," Bloomberg wrote.

Since the invasion of Ukraine, Russian raw material trading companies, from metals (including nickel and steel) to wood, have had problems receiving payments and purchasing equipment and raw materials. Even in China, financial transactions have become more difficult this year. Because China has not joined the international sanctions against Russia and has become a major export market for many Russian goods and a supplier of goods and equipment. This is mainly due to the warning of secondary sanctions issued by the US Treasury Department.

At the same time, some commodity companies have chosen different payment methods. For example, some steel producers use so-called barter transactions, which exchange goods for supplies to Russia. The source added that in this way they can completely avoid cross-border transfers.

Source: Ukrinform