Russian Companies Turn to Stablecoins Like Tether to Evade U.S. Sanctions
Secondary U.S. sanctions are causing Russian companies to explore alternative payment methods, with stablecoins like Tether gaining traction. Meanwhile, the BRICS nations are considering cryptocurrencies to bypass dollar dominance in international trade.
Russian companies, facing difficulties in bank transfers due to sanctions, are turning to stablecoins such as Tether (USDT) for payments. This shift is not only happening with sanctioned entities but also with those not directly targeted, like two Russian metal producers who have started using Tether for transactions.
Chinese banks are refusing Russian customers to avoid potential penalties from U.S. secondary sanctions. This has led Russian smugglers to use Tether to evade sanctions on weapons and drone parts. However, the use of stablecoins does not help BRICS nations break away from the dollar but rather entangles them more with it.
The BRICS countries - Brazil, Russia, India, China, and South Africa - are discussing the use of cryptocurrencies amid concerns about their high volatility. While stablecoins like Tether offer a sanctions-proof and efficient alternative to traditional banking systems, their suitability for stable financial transactions and international trade is still debated.
Sanctions are pushing Russia and China to adopt more efficient payment systems, which are ahead of those used in Europe and the U.S. The Russian Central Bank supports the use of crypto payments in international transactions, with certain limitations. As sanctions become more effective, more companies are expected to turn to stablecoins for circumventing them.
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