Russian and Chinese authorities have found a proper payment means for mutual trade. It is the cryptocurrency Tether! Some are wondering what particular features this altcoin bears so the leaders of both countries have picked it for mutual settlements.
According to Bloomberg, Russia increasingly uses the cryptocurrency Tether, selling its commodities to China. Bloomberg reported that two major Russian metallurgical companies which are not under sanctions were the first to settle their invoices in Tether. Apart from Tether, they agreed to use other cryptocurrencies for transactions with Chinese partners. Interestingly, most of these transactions are carried out through Hong Kong.
Beijing welcomes such transactions that fit into its flexible approach. Remarkably, China has not joined the anti-Russian sanctions but cannot ignore the warning from the US Treasury about secondary sanctions. Nowadays, China is the main export market for most Russian goods.
Experts say that using cryptocurrencies for payments is a common practice for countries under sanctions. Bloomberg refers to Venezuela which has found itself in a similar situation. Citing Adewale Adeyemo, Deputy Secretary of the US Treasury, Russia is shifting focus to "alternative payment methods to circumvent Western sanctions." This primarily concerns stablecoins, i.e. tokens whose value is pegged to any popular asset, namely the US dollar, the euro, or gold.
In early April 2024, it became known that the Bank of Russia called on legislators to speed up the development of the legislation on the use of digital currencies in international settlements.