Russia’s two largest unsanctioned metal producers have reportedly begun using Tether’s USDT stablecoin for cross-border transactions with Chinese clients and suppliers.
Russian commodities giants have reportedly started using stablecoins to settle cross-border transactions with China as the U.S. Treasury Department previously made it clear it would impose secondary sanctions on lenders facilitating sanctions evasion.
As Bloomberg reports, citing top executives at two Russian metal companies, the metal producers have turned to the USDT stablecoin and in some cases settle their trades through Hong Kong. While the volume of these trades remains unclear, the sources close to the companies claim the current alternatives to stablecoins are slower or even worse, risking an overseas bank account that could be frozen. As of press time, Tether made no public statements regarding the matter.
Cryptocurrencies are unlikely to allow Russia to evade international sanctions effectively as Chainalysis co-founder Jonathan Levin earlier highlighted the transparency of major blockchain networks, which makes it difficult for sanctioned entities to launder large amounts of cryptocurrency systematically.
“By mapping a single cryptocurrency wallet address to an illicit actor, whether that be a ransomware attacker or sanctions evader, law enforcement can unlock immediate insight into the entire network of services that facilitate the actor.”
Jonathan Levin
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Nonetheless, sanctioned regions continue to explore ways to circumvent Western restrictions. In mid-April, crypto.news reported that Venezuela’s state-run oil company PDVSA increased its use of USDT in crude and fuel exports amid tightening U.S. sanctions.
Venezuelan oil minister Pedro Tellechea noted at the time that the country uses “different currencies, according to what is stated in contracts,” with some contracts preferring cryptocurrency as a payment method. Following Tellechea’s statement, Tether publicly reiterated its commitment to adhere to the OFAC SDN list and announced plans to ensure sanctioned addresses are promptly frozen.
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