Russian commodity companies facing difficulties in conducting financial transactions with Chinese partners have started using cryptocurrencies for payments. According to Ukrainian state news agency Ukrinform, Bloomberg reported this news, citing anonymous sources.
Bloomberg wrote that at least two major metal producers, not subject to Western sanctions, have started using stablecoins from Tether Holdings Ltd and other cryptocurrencies to settle international transactions with predominantly Chinese customers and suppliers. In some cases, payments are being made through Hong Kong.
“In a move that highlights the long-term effects of international restrictions imposed on the country’s economy in response to the war, Russian large enterprises started turning to blockchain two years after the invasion of Ukraine in February 2022,” Bloomberg wrote.
Since the invasion of Ukraine, Russian raw material trading companies, from metals (including nickel and steel) to timber, have faced difficulties in receiving payments, purchasing equipment, and acquiring raw materials. Even in China, financial transactions have become more challenging this year. This is mainly due to the warning of secondary sanctions issued by the US Treasury Department.
Meanwhile, some commodity companies have opted for alternative payment methods. For example, some steel producers are using barter trade, exchanging goods for the goods supplied to Russia. Sources added that through this method, they can completely avoid cross-border transfers.
Source: Ukrinform