Stablecoins are changing the global trade landscape

Recently, an analysis report delved into the impact of stablecoins on global trade, particularly their application in a sanctions environment, as well as their importance as emerging financial infrastructure. The report also focused on the adoption of stablecoins by countries such as Russia and China.

Main Points

• Stablecoins have evolved from niche tools into an important financial infrastructure for high-risk cross-border commerce, with Russia's use in oil trade being a prime example.

• Despite restrictions on domestic cryptocurrencies, China and India have benefited from stablecoin trading with Russia, experiencing the efficiency of decentralized finance at a national level.

• Governments around the world have varying attitudes towards stablecoins, but there is a common recognition that they are reshaping the way cross-border value flows.

Stablecoin: From Speculative Tool to Strategic Currency

The global importance of stablecoins is continuously increasing, evolving from a speculative tool for individual use to a practical financial tool at the institutional and even national level.

Initially, stablecoins were primarily used for cryptocurrency trading, capital transfer, and gaining liquidity, especially in markets with limited banking infrastructure or capital controls. Subsequently, their applications expanded into the corporate sector for cross-border payments, vendor settlements, and payroll disbursements, particularly popular in emerging markets where traditional banking services are unreliable or expensive.

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

The Practical Application of Stablecoins in Global Trade

Russia is integrating stablecoins and major cryptocurrencies into its oil trade with China. The trading model is relatively simple: Chinese buyers transfer their domestic currency to an intermediary, who converts it into stablecoins or other digital assets, and then transfers it to Russian exporters, who then exchange the funds for rubles. This process reduces sanction risks and enhances trading resilience.

In these transactions, stablecoins play a key role. Compared to Bitcoin and Ethereum, stablecoins offer price stability, high liquidity, and ease of transfer, making them more suitable for large transactions.

It is worth noting that although China has implemented strict restrictions on domestic cryptocurrency use, it seems to take a tolerant attitude towards stablecoin trading in energy trade with Russia. This dual stance reflects a balance between actual demand and regulatory caution.

Apart from Russia, countries under sanctions such as Iran and Venezuela are also turning to stablecoins to maintain international trade. Even if sanctions are eased, settlements based on stablecoins may still continue due to their significant operational advantages.

Global Stablecoin Development Trends

Russia has experienced the practicality of stablecoins through practice and is calling for the development of a ruble-backed stablecoin to reduce dependence on foreign issuers. Other countries are also accelerating the exploration of stablecoin adoption, not only to evade sanctions but also viewing it as a tool to enhance monetary sovereignty or respond to geopolitical changes.

Multiple countries and regions have taken action:

• Thailand has approved the trading of USDT and USDC.
• Japan has launched a regulated USDC
• Singapore has established a single currency stablecoin regulatory framework.
• Hong Kong announced the stablecoin bill.
• The United States is discussing relevant legislation.
• Major banks in South Korea are preparing to issue the first Korean won stablecoin.

These developments indicate that stablecoin regulation has moved from conceptual discussions to practical implementation, with governments actively shaping its legal and operational parameters. Despite differing attitudes among countries, there is a general recognition that stablecoins are becoming an important component of the global financial infrastructure.

Stablecoin: New Financial Infrastructure

The growth of stablecoins in cross-border transactions reflects a fundamental transformation in financial infrastructure. Even countries that have traditionally been skeptical of cryptocurrencies, such as China and India, are beginning to indirectly utilize stablecoins in strategic commodity trade.

This development has gone beyond mere sanction evasion; stablecoins are evolving from retail-level experiments to integration at the institutional and even national levels. As a result, stablecoins are increasingly being viewed as a legitimate component of the modern financial system rather than a tool for illegal activities.

Institutions that view stablecoins as structural elements of future financial architecture may gain a leading position in the next wave of financial innovation. In contrast, institutions that delay participation may face the risk of passively adapting to standards set by others. Therefore, policymakers and financial leaders must deeply understand the nature of stablecoins and their long-term potential, and develop strategies that align with the evolution of the global financial system.