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In the shadow of economic restrictions imposed by the West, Moscow follows a new way for its energy trade. In the face of the exclusion of the international financial system, Russia has found an alternative solution: the use of Bitcoins (BTC) and Tether (USDT) to circumvent sanctions and ensure the continuity of their oil exports to its allies BRICS.
Oil shop that now supports Kryptos
Western sanctions have greatly reduced Russian capacities to trade in conventional currencies. Moscow, which was deprived of access to the dollar and Swift system, had to explore other opportunities with its BRICS partners to secure its financial flows with its Asian partners. In this context, Kryptos such as Bitcoin and Tether (USDT) have become privileged tools for facilitating cross payments.
- Economic necessity: to face restrictions by Russia had to turn to alternatives to maintain its international trade;
- Company sanctions: Kryptos avoid restrictions by the Western banking by operating outside traditional districts;
- Continuous volumes: Russian business oil trader would say that these transactions represent tens of millions of dollars each month.
The process is based on the system of intermediaries and offshore accounts. Specifically:
- Chinese Russian buyer oils in Yuan on a coastal account;
- The financial intermediary converts this amount to a crypto;
- Funds are then transferred to Russia, where they are exchanged in rubles.
This mechanism allows you to speed up transactions, guarantee better financial discretion and run without browsing banks in international supervision.
Towards the sustainable acceptance of Kryptos at the BRICS store?
In addition to its cyclic aspect, this strategy could fit into wider dynamics, especially the BRIC framework. These developing economies have been looking for their dependence on the US dollar for several years, perceived as a geopolitical weapon in the United States.
- The emerging trend: other states in sanctions could follow a Russian example and accept cryptos for international trade;
- Threat for the dollar: If BRICS generalizes the use of crypts, it could weaken the hegemony of the green back in the world exchanges;
- Strategic placement: Russia is testing an economic model that could be accepted and amplified in the future.
However, some partners of the Brics alliance, such as China and India, remain careful about the rise of the cryptos.
- Contrast posture: Although China allows certain transactions in digital Yuan, the government continues to limit the use of bitcoins on its territory.
- Still vague legal framework: The question remains open to the future of crypto transactions in China’s official trade.
- Inner resistors: BRICS central banks could hesitate to massively adopt cryptes as a transaction tool.
However, even if the sanctions are reduced, “crypto remains a key tool because it allows to function faster and without restrictions”.
The use of cryptus Russia in the oil store asks several basic questions:
- Will Kryptos become a strategic lever for states in sanctions?
- Does the Russian model inspire another nation?
- Will BRICS accept an alternative money solution on a large scale?
If this approach was expanded, financial power relations could disrupt and speed up the transition to the multipolar economy, less dependent on Western institutions. For the next few months, it will be decisive to observe whether this trend has been expanding to other BRIC members and whether the rise of Kryptos in the world trade will become inevitable.
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A graduate of the Toulouse and the Blockchain Consultant Certification certification holder and I joined the adventure of Cointribuna in 2019. I convinced of the potential of blockchain to transform many economy sectors, committing to raising awareness and informing the general public about how the ecosysty developed. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.