Russian companies are increasingly facing difficulties in international settlements due to the threat of secondary sanctions for their counterparties. Against this background, cryptocurrencies and payments through intermediaries are gaining more and more popularity, writes Bloomberg.
The biggest problem for Russia is transactions with China, with which trade reached a record $240 billion in 2023.
In many cases, transactions with China are possible only through agents in the former Soviet republics, the heads of the four commodity exporters said on condition of anonymity. During these transactions, foreign currency, including yuan, does not reach the Russian Federation.
"While Chinese customers pay in yuan to agents in third countries, exporters often receive rubles in Moscow," people familiar with the situation told the newspaper, noting that many intermediary countries have their own restrictions on the movement of currency.
Cryptocurrency payments through Hong Kong are also becoming increasingly popular, but even in these cases, Russians have to use the services of intermediaries in countries such as Uzbekistan or Kazakhstan. Russian companies have even tried to use barter deals or currency swaps with importers at the same banks, other knowledgeable sources said.
The situation with Turkey is less deplorable — only some banks have stopped operations with the Russian Federation in the country. Trading calculations are carried out mainly in rubles.
In the case of India, the pressure on banks due to the threat of sanctions is complicated by the fact that the rupee is not fully convertible. Russia has accumulated billions of dollars in it in local banks.
To resolve the situation, the Reserve Bank of India in July 2022 allowed these funds to be invested in local projects or Indian securities, as well as to direct them to future purchases of goods and services. Periods of blocking and the inability to transfer invested funds make it difficult for the Russian Federation to eliminate them, people familiar with the rules said.
Oil, the main export commodity from Russia to India, is mainly paid for by the UAE dirhams pegged to the US dollar. Some of the calculations are carried out in dollars, euros and yuan. In general, trade with India quite often goes through intermediate countries and in currencies other than the rupee, which makes trade expensive, said a source close to the Russian government.
Earlier, the Central Bank of the Russian Federation supported cross-border bitcoin payments, and also pointed out their advantages for circumventing Western sanctions and facilitating the transfer of currency abroad. In June, the first deputy chairman of the regulator, Vladimir Chistyukhin, proposed resorting to swaps and using cryptocurrencies "so that the wheels continue to turn."
"[If] there are no normal payments for products for foreign economic activity, this [will be] the death of our export and import—dependent country," he said (quoted by RBC).
Recall that at the end of February 2024, the Russian Federation allowed payments with digital financial assets and utilitarian digital rights under international agreements.
On July 24, the State Duma adopted in the first reading a bill on an experimental legal regime allowing the use of cryptocurrencies for external payments.
Also, at the level of the Central Bank of the Russian Federation, it is planned to legalize stablecoins for such calculations.