Summary of key points
Russia’s use of stablecoins in oil trade shows that stablecoins are no longer fringe instruments — they have become real financial infrastructure in high-stakes cross-border commerce.
Despite restrictions on domestic cryptocurrencies, China and India have benefited from stablecoin transactions with Russia, quietly experiencing the efficiency of decentralized finance at the national level.
Governments around the world are responding in different ways, but all acknowledge that stablecoins are reshaping the way value flows across borders.
1. The rise of stablecoins as strategic currencies under sanctions
Stablecoins are growing in global importance not only as speculative instruments but also as practical financial tools - first for individuals, then institutions, and now entire countries.
The rise of stablecoins began in crypto-native environments, with traders using stablecoins such as USDT and USDC to trade, efficiently transfer capital, and access liquidity on centralized and decentralized platforms. Stablecoins enhance access to the U.S. dollar, especially in markets with limited banking infrastructure or capital controls.
Subsequently, stablecoin adoption expanded to institutional and B2B use cases. Businesses began using stablecoins for cross-border payments, supplier settlements, and payroll, especially in emerging markets where traditional banking services are unreliable or costly. Compared to wire transfers via SWIFT or correspondent banks, stablecoin transactions are settled almost instantly, without intermediaries, and at significantly lower costs. This makes stablecoins not only efficient, but also increasingly indispensable for companies operating in politically or economically unstable regions.
Now, stablecoins are being tested at the national level, with their role shifting from convenience to strategic. Countries facing sanctions or seeking alternatives to the U.S.-dominated financial system, such as Russia, have turned to stablecoins.
As stablecoins move from being a corporate tool to a tool for trade at the national level, their role evolves from an operational convenience to a political necessity. This report will explore how stablecoins are being used to circumvent restrictions, reduce costs, and open new trade routes through real-world case studies.
2. Practical applications of stablecoins: How global trade adapts behind the scenes
Source: Statista
Russia is increasingly incorporating stablecoins such as USDT and major cryptocurrencies such as Bitcoin and Ethereum into its oil trade with China. According to a Reuters report in March 2025, this represents a strategic effort to circumvent Western sanctions.
The transaction model is relatively simple. Chinese buyers transfer domestic currency (such as RMB) to intermediaries, who convert it into stablecoins or other digital assets. These assets are then transferred to Russian exporters, who then convert the funds into rubles. By excluding Western financial intermediaries, this process reduces sanctions risks and enhances transaction resilience.
Among the digital assets used in these transactions, stablecoins play a particularly critical role. While Bitcoin and Ethereum are occasionally used, their price volatility makes them unsuitable for large transactions. In contrast, stablecoins such as USDT offer price stability, high liquidity, and ease of transfer, qualities that support their growing role in cross-border settlements in restricted environments.
Notably, China continues to impose strict restrictions on domestic cryptocurrency use. However, authorities appear to be tolerant of stablecoin transactions in the context of energy trade with Russia. While not formally endorsed, this selective tolerance reflects pragmatic priorities, especially the need to maintain commodity supply chains under geopolitical pressure.
This dual stance—combining regulatory caution with practical engagement—underscores a trend that is quietly adopting digital assets for their operational practicality even within officially restrictive regimes. For China, stablecoin-based settlements offer a way to bypass the traditional banking system, reduce reliance on the dollar, and safeguard trade continuity.
Source: Chainalysis
Russia is not alone. Other sanctioned countries, such as Iran and Venezuela, have similarly turned to stablecoins to maintain international trade. These examples suggest that the use of stablecoins as a tool to maintain business functions in politically restricted environments is growing.
Even if sanctions ease over time, stablecoin-based settlements are likely to continue to be used. The operational advantages — faster transactions and lower costs — are significant. As price stability becomes an increasingly critical factor in cross-border trade, more countries are expected to step up discussions on stablecoin adoption.
3. Global Stablecoin Momentum: Regulatory Updates and Institutional Changes
Russia in particular has experienced the usefulness of stablecoins firsthand. After the U.S. froze wallets associated with sanctioned exchange Garantex, Russian Finance Ministry officials called for the development of a ruble-backed stablecoin — a domestic alternative that would reduce reliance on foreign issuers and protect future transactions from external controls.
In addition to Russia, several other countries are also accelerating their exploration of stablecoin adoption. While Russias main motivation is to circumvent external sanctions, many other countries see stablecoins as a tool to enhance monetary sovereignty or respond more effectively to geopolitical changes. Its appeal also lies in the potential for faster and lower-cost cross-border transfers, highlighting the role of stablecoins as a driver of financial infrastructure modernization.
Thailand: In March 2025, the Securities and Exchange Commission of Thailand approved USDT and USDC transactions.
Japan: In March 2025, SBI VC Trade partnered with Circle to launch USDC, which received regulatory approval from the Japan Financial Services Agency (JFSA).
Singapore: In August 2023, a regulatory framework for single-currency stablecoins (pegged to the Singapore dollar or a G10 currency) was established, allowing banks and non-banks to issue them.
Hong Kong: Stablecoin bill announced in December 2024, requiring issuers to obtain a license from the Hong Kong Monetary Authority; regulatory sandbox underway.
United States: No comprehensive legislation yet. In April 2025, the SEC stated that fully-backed stablecoins such as USDC and USDT are not securities. In March 2025, the GENIUS Act passed by the Senate Banking Committee aims to regulate payment stablecoins. USDC and USDT are still widely used.
South Korea: Major domestic banks are preparing to jointly issue the first Korean won stablecoin.
These developments reveal two key trends. First, stablecoin regulation has moved beyond conceptual discussions, with governments actively shaping its legal and operational parameters. Second, a geographic divide is taking shape. Countries like Japan and Singapore are pushing for regulated stablecoin integration, while countries like Thailand are taking stricter measures to protect domestic monetary controls.
Despite this division, there is a general global recognition that stablecoins are becoming a permanent part of the global financial infrastructure. Some countries see them as a challenge to sovereign currencies, while others see them as a faster and more efficient payment tool for global trade. As a result, the importance of stablecoins in regulatory, institutional and commercial circles is rising.
4. Stablecoins are not a quick fix — they are a new financial infrastructure layer
The growing use of stablecoins in cross-border transactions reflects a fundamental shift in financial infrastructure, not just an attempt to circumvent regulation. Even countries that have historically been skeptical of cryptocurrencies, such as China and India, have begun to use stablecoins indirectly in strategic commodity trade, experiencing their practical utility firsthand.
This development goes beyond sanctions circumvention. Initial retail-level experiments have evolved into institutional and even national-level integration, making stablecoins one of the few blockchain innovations to demonstrate true product-market fit. As a result, stablecoins are increasingly viewed as a legitimate part of the modern financial system rather than a tool for illicit activity.
Institutions that view stablecoins as structural elements of the future financial architecture—rather than temporary solutions—are likely to take the lead in the next wave of financial innovation. In contrast, those that delay participation risk passively adapting to the standards set by others. Therefore, it is imperative that policymakers and financial leaders understand the nature of stablecoins and their long-term potential, and develop strategies that are consistent with the direction in which the global financial system evolves.
