Russia-Based Commodity Companies Embrace Cryptocurrency Transaction for International Business

Due to geopolitical and economic challenges, Russian commodities companies are shifting their strategy and increasingly using cryptocurrencies to facilitate trade with China. Because of the West’s harsh economic sanctions imposed on Russia as a result of its ongoing geopolitical disputes, Russia’s access to international financial networks has been severely limited.

These sanctions have singled out the Russian economy’s main sectors—energy, metals, and agriculture—effectively cutting off Russian companies from the global banking system and complicating their trading operations.

Russian commodities exporters are looking for different ways to do business in reaction to these difficulties, and cryptocurrencies have shown to be a workable alternative. Two big metal manufacturers (names withheld) with an unsanctioned operations have started using Tether for foreign transactions, amid their ‘unsanctioned’ operational status.

This activities has also extended to their Chinese suppliers and customers alike. Top executives in the Chinese companies said that they conceal such information, and most times had to travel to Hong Kong to make the transactions.

Russian Commodities Company’s Adoption Termed Efficient, China Moves in

The use of cryptocurrency by Russian commodities companies has made trade operations more reliable and efficient. Businesses involved in the oil, gas, and precious metals industries have noted a rise in the use of cryptocurrencies like Bitcoin and Ethereum for transaction settlement with Chinese counterparts.

 In addition to aggressively promoting the use of its digital yuan (e-CNY), the Chinese government has been investigating blockchain applications for trade and banking. This technological infrastructure facilitates business interactions between Chinese companies and their Russian counterparts through smooth Bitcoin transfers.

China’s collaboration in the use of cryptocurrencies is further driven by its strategic interest in ensuring a steady supply of Russian commodities like oil and natural gas. The capacity to evade Western financial institutions is consistent with China’s overarching goal of lessening its dependency on the United States dollar and lessening the effects of international sanctions.

Russia Lists Selected Countries for Transaction, Forms Alliance with China

According to financial commentators, the increasing usage of cryptocurrencies in commerce between Russia and China may encourage the wider adoption of virtual currencies in other sanctioned economies. Russia’s approach may be limited by nations like Venezuela and Iran, which are likewise subject to severe international sanctions.

This could lead to the development of a parallel financial ecosystem that functions outside of established legal structures. Analysis has shown that China has been Russia’s biggest exporter of goods for over two years.

Some financial difficulties have continued to emerge during financial transactions between the two countries, including Hong Kong, because of the threat of secondary sanctions by the United States Treasury Department. Some external factors are slowly compelling regulators to review their position on cryptocurrency transactions on the international scene.

As of press time, Russian legislators are looking into creating a legal guideline for the use of stablecoins in overseas transactions. If passed, this will lead to an official acceptance of the use of cryptocurrency in subverting the conventional financial obstacles seen in international transactions. 

Tether Denies Involvement in Black Market Operations, Countries Finds Solutions 

These affected countries have taken to using USDT as an alternative to navigate these difficulties. The method has been described as a way of mitigating the risk associated with freezing the accounts of overseas account owners. Reports have shown that this event has been reoccurring amid some steps taken by the affected parties to open multiple accounts in many locations. 

Daria Krasnova from Bein Crypto has cited Venezuela as the most affected country by this development and explained how the country resolved to use Tether to conduct its oil transactions. This has also been described as evidence of the growing influence of stablecoins in international trade transactions.

Meanwhile, Tether, the official creator of the USDT, has been accused of conducting a black market trade, an allegation they have vehemently denied. The company has remarked on its commitment to cooperating with every law enforcement agency in the world and highlighted the USDA’s traceability.

Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.