Russia’s largest commodity exporters have begun using cryptocurrencies to keep trade flowing with key partner China as Western sanctions weigh on the Russian economy. Some top metals and mining companies have begun using stablecoins like Tether (USDT) to settle cross-border transactions, according to company executives.

At least two of Russia’s largest producers of unsanctioned metals have adopted Tether and other cryptocurrencies to settle some trades with Chinese partners, executives said. In some cases, those cryptocurrency settlements are routed through middlemen in Hong Kong.

Stablecoins such as Tether, which is pegged to the dollar, are particularly convenient for exporters. The alternative is often painfully slow bank transactions or frozen overseas accounts, a frequent problem even for companies not subject to sanctions. Some companies have opened dozens of accounts in multiple countries, only to have them frozen one after another.

Although China has not joined the Western sanctions, financial transactions have become more difficult this year due to US pressure on banks to enforce sanctions. This has severely affected the flow of major commodities from Russia to China, including metals, timber, etc.

Using cryptocurrencies is an increasingly common workaround for countries under sanctions. Venezuela’s oil sales to China and elsewhere are increasingly being settled in Tether through brokers in Dubai.

Russia’s stance on the adoption of cryptocurrencies for international trade is a shift for the central bank, which had previously considered a blanket ban. However, Governor Nabilina now supports “experiments” with cryptocurrencies for cross-border payments, though cautioning banks against advertising them.

Lawmakers are also drafting legislation to create a legal framework for using stablecoins for international settlements. The central bank recently noted a “significant” increase in cryptocurrency activity among Russians.

Meanwhile, cryptocurrency-related banking services are expanding rapidly in Russia. Rosbank, owned by Norilsk Nickel mining billionaire Putanin, was the first bank to offer cross-border cryptocurrency payments to businesses in June 2023. Several other Russian banks have followed suit.