Crypto’s Role in Geopolitics: How Tether Aids Russia Under Sanctions

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• Russian metal producers use Tether’s USDT to conduct transactions with Chinese partners.
• Stablecoin transactions are efficient, taking 5-15 seconds and costing a few cents.
• Russian lawmakers want to ban crypto transactions to maintain ruble dominance.

Russia’s two biggest unsanctioned metal producers have begun conducting cross-border transactions with Chinese suppliers and clients using Tether USDT stablecoin in a calculated attempt to evade possible secondary sanctions from the US Treasury.

Executives of these Russian metal companies have confirmed the use of USDT, with some transactions routed through Hong Kong. This shift became necessary since alternatives proved to be slower or riskier—and frequently resulted in frozen bank accounts—this change is necessary. Tether has not issued any public remarkson this development.

The choice of large Russian companies to adopt blockchain technology highlights the long-lasting effects of the international sanctions put in place after Russia invaded Ukraine in February 2022.

Digital currency expert Ivan Kozlov emphasized the effectiveness of stablecoin transactions, which cost very little and take only 5 to 15 seconds. Exporters who hold their assets in stablecoins stand to gain, especially from this. Tether, with its USDT linked to the US dollar, offers a trustworthy medium for these exchanges.

Kozlov added that there are often slower procedures or the possibility of having bank accounts frozen overseas when using alternatives to stablecoins. Multiple account freezes across several countries for some unsanctioned companies highlight the unstable nature of conventional financial channels.

Kozlov says that in nations dealing with capital controls and dollar liquidity issues, using cryptocurrencies and dollar-linked stablecoins for cross-border payments is becoming standard practice.

This trend extends beyond commodities trading and reflects a broader shift in how global transactions are conducted in the face of stringent financial regulations.

On the other hand, as per a prior Coin Edition report, Russian lawmakers are planning to ban the use of cryptocurrencies in order to preserve the supremacy of the ruble. Starting September 1st, only digital assets issued in Russia will be allowed, signaling a major regulatory shift on the horizon.

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