Stablecoins are reshaping the global trade landscape

A recent analysis report delves into how stablecoins are changing the global trade landscape, especially in the context of sanctioned environments, and their increasingly important role as legitimate financial infrastructure. The report also focuses on the adoption of stablecoins by countries such as Russia and China.

Main Points

• The application of stablecoins in the Russian oil trade indicates that they have transformed from marginal tools into key financial infrastructure for high-risk cross-border commerce.

• Despite implementing restrictions on domestic cryptocurrencies, China and India benefit from stablecoin transactions with Russia, effectively experiencing the efficiency of decentralized finance at a national level.

• Governments around the world are adopting different responses, but there is a general recognition that stablecoins are changing the pattern of cross-border value flows.

Stablecoin: From Speculative Tool to Strategic Currency

The global importance of stablecoins continues to rise, not only as a speculative tool but also as a practical financial instrument. Its application has expanded from individuals to institutions, and now even extends to the national level.

Stablecoins initially emerged in the cryptocurrency ecosystem, with traders using stablecoins like USDT and USDC for trading, capital transfers, and obtaining liquidity. In markets with limited banking infrastructure or capital controls, stablecoins have enhanced the accessibility of the US dollar.

Subsequently, the application of stablecoins expanded to transactions between institutions and enterprises. Companies began using stablecoins for cross-border payments, vendor settlements, and payroll disbursements, especially in emerging markets where traditional banking services are unreliable or costly. Compared to wire transfers through traditional banking systems, stablecoin transactions settle almost instantly, without intermediaries, significantly reducing costs.

Currently, stablecoins are being tested at the national level, with their role shifting from a convenience tool to a strategic asset. Countries facing sanctions or seeking alternatives to the US-dominated financial system, such as Russia, have begun to turn to the use of stablecoins.

The Practical Application of Stablecoins in Global Trade

Russia is increasingly incorporating stablecoins like USDT and major cryptocurrencies such as Bitcoin and Ethereum into its oil trade with China. This represents a strategic effort to circumvent Western sanctions.

The trading model is relatively simple: Chinese buyers transfer domestic currency to intermediaries, who convert it into stablecoins or other digital assets. These assets are then transferred to Russian exporters, who convert the funds into rubles. By excluding Western financial intermediaries, this process reduces the risk of sanctions and enhances the resilience of transactions.

In these transactions, stablecoins play a particularly crucial role. Although Bitcoin and Ethereum are occasionally used, their price volatility makes them unsuitable for large transactions. In contrast, stablecoins like USDT offer price stability, high liquidity, and ease of transfer, characteristics that support their growing role in cross-border settlements in restricted environments.

It is worth noting that China continues to impose strict restrictions on the use of domestic cryptocurrencies. However, in the context of energy trade with Russia, authorities seem to adopt a tolerant attitude towards stablecoin transactions. This dual stance highlights a trend: even under official restrictive policies, there is a quiet adoption of digital assets for their operational practicality.

Russia is not an isolated case. Other sanctioned countries, such as Iran and Venezuela, are also turning to stablecoins to maintain international trade. These examples indicate that the use of stablecoins as a tool to sustain commercial functions in politically constrained environments is on the rise.

Global Stablecoin Momentum: Regulatory Updates and Institutional Shifts

Russia has experienced the practicality of stablecoins through firsthand experience. After the U.S. froze wallets related to sanctioned trading platforms, officials from the Russian Ministry of Finance called for the development of a ruble-backed stablecoin to reduce dependence on foreign issuers.

Apart from Russia, several other countries are also accelerating the exploration of stablecoin adoption. Many countries view stablecoins as a tool to enhance monetary sovereignty or respond more effectively to geopolitical changes. Their appeal also lies in the potential for faster cross-border transfers and lower costs, highlighting the role of stablecoins as a driving force for the modernization of financial infrastructure.

Multiple countries and regions have taken action:

• Thailand has approved trading of USDT and USDC.
• Japan has launched a regulated USDC.
• Singapore has established a regulatory framework for a single currency stablecoin.
• Hong Kong has announced a stablecoin bill.
• The United States currently has no comprehensive legislation, but the SEC has stated that fully-backed stablecoins are not considered securities.
• Major banks in South Korea are preparing to jointly issue the first Korean won stablecoin.

These developments reveal two key trends. First, stablecoin regulation has moved beyond conceptual discussions, and governments are actively shaping its legal and operational parameters. Second, geographical differentiation is taking shape, with different countries adopting different regulatory approaches.

Stablecoin: The New Layer of Financial Infrastructure

The growing use of stablecoins in cross-border transactions reflects a fundamental shift in financial infrastructure, rather than merely an attempt to evade regulation. Even countries that have historically been skeptical of cryptocurrencies are starting to indirectly utilize stablecoins in strategic commodity trading.

This development goes beyond sanction evasion. Stablecoins are increasingly seen as a legitimate part of the modern financial system, rather than as tools for illegal activities.

Institutions that view stablecoins as structural elements of future financial architecture may take the lead in the next wave of financial innovation. Conversely, those institutions that delay participation may face the risk of passively adapting to standards set by others. Therefore, policymakers and financial leaders must understand the nature of stablecoins and their long-term potential, and develop strategies that align with the evolving direction of the global financial system.