Russian commodities firms are said to be utilizing the popular stablecoin USDT to conduct financial transactions with Chinese companies, according to reports. Bloomberg, citing executives from these firms, states that at least two metals producers in Russia are using Tether’s stablecoin and other cryptocurrencies to facilitate cross-border transactions with clients and suppliers in China. These companies, which have not been subjected to sanctions, reportedly occasionally route settlements through Hong Kong. Although China did not impose sanctions on Russian firms following Russia’s invasion of Ukraine in 2022, Chinese lenders have reportedly strengthened their compliance measures due to the potential for secondary sanctions for working with Russian firms. USDT, which aims to maintain a 1:1 peg to the US dollar, is currently the largest stablecoin by market capitalization. Ivan Kozlov, co-founder of crypto firm Resolv Labs, states that cross-border transactions using dollar-pegged stablecoins are a common practice in countries facing dollar liquidity issues and capital controls. He adds that stablecoin transfers can be completed in a matter of seconds and at a low cost, making them an efficient option for transactions when the sender already holds stablecoin assets. Bloomberg also reports that some Russian steelmakers are bypassing cross-border transactions altogether and instead exchanging their products for goods shipped into Russia.